>> if you're an apple person, it's used on the maps. i thought apple would buy yelp but haven't. >> we're going back and forth about the tim armstrong/aol situation. we're still going to think about this. not sure where we're going. >> join us tomorrow. right now it's time for "squawk on the street." ♪ happy birthday to you happy birthday to you ♪ ♪ happy birthday >> when you get as old as my partner, celebrate every one of them. good morning, welcome to "squawk on the street." i'm david faber with jim cramer. happy birthday. hear from carl as well at the olympics in sochi momentarily. happy birthday. >> thank you very much. >> stake a look at futures. happy to be here, not just for your birthday, i tonight know why. >> olympics exciting, isn't? i watched them all weekend.

even the opening, putin, i'm not a big fan. >> that's shocking, yeah. >> i am still into the notion of humanity. put on a good show. >> the horses were really cool. you saw the market. we looked like we may open lower this morning. take a look at ten-year. do we have that? 2.69, almost around 2.7. up a bit from earlier in the week, of course. but we've got unemployment number on friday. we ent went up. europe, it is -- call it a mixed picture. markets largely up. asia was strong as well. and let's get to our road map here, back in the u.s. of a. futures, mixed after the indices turned in the best week of 2014, biggest gains thursday and friday since october. and ant-icahn over apple, scott

stringer urging apple shareholders to vote against icahn's share buy-back proposal. stringer will join us live here on the set later in the show. mcdonald's reporting doesn't expect january sales for europe, asia, middle east, and africa, offsetting what was a sharp monthly sales decline in the united states. and yelp, you heard it here first, those shares are higher in the premarket on reporting it's partnering with yahoo! to beef up the search everyonngine results. stocks in europe and asia trading largely higher today, helped by friday's jobs report, although it wasn't a strong report, as you know. focus here on the u.s. falling on the fed chair, janet yellen's first testimony before congress on tuesday, many expect, of course, we're not going to get any real change in the taper talk. >> right. >> were you surprised by the

strength on friday? >> you know we added insight that this could happen. when we had a couple of retailers report really bad numbers and the stocks ran. now i was thinking over the weekend how it all kind of began with coals, sounds strange, but coals reported a down 2 comp number, cut forecasts, and the stock went up a couple bucks and that was the beginning of a counterintuitive run you saw throughout friday. gm reporting a number that looked on the surface of a disappointing stock, went down, rallied, big engine company, we had a belief things too negative. this morning, dick's reporting better than expected quarter. you could have got than under armour. retail let us down and retail led us up. >> escaped the hold of emerging market concerns for a bit, whether it be turkey, argentina?

we're concerned about that but of course there was concern, perhaps it was well justified but it does seem to have abated a bit. >> we get the great second and third week. turkey has problems, here what happens caused. the devaluation for turkey's not as devastating as it was in 1992, where it was hideous. argentina, people starting to get the idea that people switch their economic policy, and it was a bad policy, became very venezuelan. if brazil were to go venezuelan, which there is no sign, that would be terrible. mexico's doing quite well. obviously things have slowed. you you get one country in one area and people think contagion and that's what happened with argentina and turkey. >> we haven't had the contagion. mexico, love the population numbers on the olympic opening ceremonies, 118 million people. >> mexico'shood a remarkable resurgence in what i regard as

being tourism. when i say tourism, it was down big because of issues with cartel activity. that's changed. he's doing something amazing, he's saying that they're going to open up the oil work. economy slowed, i'm not going to deny that, and the peso's not had a good run, as i know from my investing. peso's not so hot. >> let's move on to apple, the icahn saga continues. now investors weighing in as well. proxy advisory firm, not investors but the firms that advised them, iss recommends that shareholders vote against icahn buyback proposal for apple as new york city comptroller stringer plans to vote other investors to vote against icahn's plan. mr. stringer will be live with us later on to talk about it. of course, as i say, it's unfortunate that these shareholder advisory services even have any power at all but they do, typically take an

enormous amount of management's time when you get into proxy fights, the likes of which we may see in the not too distance future over time warner cable. i read the report last night. you know, they make some valid points. icahn doesn't have a lot of momentum here in terms of support of a $50 billion worth of buyback by the end of the fiscal year. his ask came way down from 150 billion immediately to what is the proposal to $50 billion. but it does have the tendency to spotlight how much cash they have, what is it? >> a lot. >> most of it overseas. >> right. >> which focuses you again on whether we'll ever get tax reform. but at this point, distributing much cash as they're generating in the u.s. did the big borrowing. the biggest distributor of cash in the country for ten billion in dividends and buybacks. 18 billion more to go to meet the 50 billion. >> i wrote that i felt it was terrific they had become

aggressive, okay? aggressive buyback, brought 14 billion down to the weakness. icahn tweeted that he felt he agreed with me, i said are you going on scott wapner's show? he said, no need to go on wapner's show agree with you, jim, it's aggressive. i don't think icahn's a factor here. >> i think you're right. he's riding alongic look a lot of other people, 3.6 billion or more in stock, it's not an insignificant position. >> no. >> even when you have $20 billion percentage wise, it's got to be one of his larger holdings, but he's probably waiting for a new product, like everybody else. >> like everybody else. very joyous about the idea that apple was opportunistic. we see too many buybacks, initial ones, cook said on the last conference call, up or down, we'll buy our stock. these not what icahn wants to hear. he wants to hear, down, 1 million -- >> 14 billion. >> 500 bid for 2 million, that's

what he wants. in the end, also understands trading. did appear they were doing a 500ed by for 2 million, and then they get drilled, okay, another 500 bid for 2 million, they get drilled and people say, wait a second. they can go to 501 bid. this how it's done by the pros. i think apple took control of this and was powerful in the marketplace. >> apple, let's assume cat -- the focus on cash is no -- we're going to always talk about it. >> right. >> what is the next thing that conceivably moves? >> the growth is one-third of what google's is. you need growth. >> multiple is ten. >> you need social. look, mark has taught us a great da deal salesforce.com. you need social and connectivity. apple needs to make an acquisition that boosts social and connectivity. >> one of things they're

applauded for not doing value destroyi destroying m&a transactions. >> snapchat. >> we have seen acquirer stocks rewarded many times. by the way, monday, no deals. >> isn't that something? >> yeah. there was asome my conductor deal. >> there was, sorry. >> it's huge. i forget the name. gigantic. i forgot the name. i'm kidding. i can draw it up, if you want. the mane thing that happened this morning, you know and i know what it was. it's the key to the market. >> yelp. >> yelp making that deal with yahoo!. i predicted at 70 last week going straight to 100. there were many cat callers, it went to 98. >> when you say something's key to the market, i listen. and i have been listening since 1995. >> distressing. >> upsetting. you were a very young man back then. we were. >> you look the same. you had the same david faber's

hair. that david faber's hair is a smart twitter. >> very good. i know. i enjoy those quips as well. haven't figure out. >> cramer's shirt. >> what can i tell you? >> i work out. because i eat a lot of mexican food. >> mcdonald's? eat a lot of that? reporting better than expected numbers. gloek global sales offset dechine in u.s. sales rose 1.2%, above analysts' estimates. colleagues at cnbc asia caught up with mcdonald's ceo don thompson at a store opening in vietnam. >> whether that be vietnam, malaysia, singapore, south korea, china, we are investing in these markets for the long term. we don't expect to just see a tremendous return on that investment year one or year two or three even in some cases. but we do expect we'll build a fundamental awareness of the brand, a base of customers that

are loyal to the brand, and satisfy those needs and continue to build our business into the future. >> vietnam may be one thing, but in u.s. comps down 3.3%. estimates down 1.7. >> i'm a big fan of don. this europe turn is very, very meaningful. he's under a lot of what i regard as being the buck marshal problem, this that is chipotle problem, chipotle, where the movie opens very soon, this chipotle movie that takes a shot at 99 cent value meal. >> chipotle will have a movie that talks about natural sourcing and all of those things and then buck marshal represents the other side of it, industrial -- >> i think. industrial food information bureau. >> sounds like something orwelli orwellian. >> one of the things, this is unbranded, new kind of messaging. taking aim at the food chain and that is going to hurt mcdonald's. can i point out to mcdonald's, stock is not down from that bad

quarter. that's because people have faith that don tompson's going to pull it out. i do, too. >> you do? >> yes. >> why? why? >> why? >> yeah. >> because, in the end, this is a place for people not wealthy to enjoy a meal. i don't take -- i stopped taking my kid there's years ago, i admit that i'm concerned about the food chain. but i do think when i saw the european numbers, i know he's moving to asia, i'm not going to give up the faith, if they have one good month in the country, the stock's at 103. i refuse to just say, to write them off, although i think this a turn in the country, in favor of natural, organic, and they are the so-called enemy of natural organic. >> mcdonald's also making its mark over in sochi. carl quintanilla joins us live. he has more on that. good morning, carl. >> interesting numbers out of mcdonald's. you know they are a global sponsor of the olympics. i can show you one picture today of the pop-up story they have

here in sochi in the olympic media village. jim david, 24 years ago this month, mcdonald's opened their first restaurant in russia on gorky street in moscow. they have 400 in the country, including some of the biggest volume restaurants in the world. as you were saying today, pretty resilient action in the european markets especially what's happened in the periphery. the u.s. a challenge, when you consider the share. they appear to have lost in the last year. up to speed on the first as we kick off the first full week of olympic coverage on all nbc universal platforms and not a bad start for team usa. not only won first gold in men's slopestyle but women's slopestyle. jamie anderson, 23, won more slopestyle competitions than any other woman on the planet. talked to her about the judges who appeared to be rewarding not just the extreme moves all of the extreme tricks, but also how

well those tricks were executed, the grace, the style. we asked her how big of a factor that was. >> watching so many talented riders and crazy tricks, seeing they're all about the flow, like how it looks. in away, it's like a dance, you know? it can look so beautiful and graceful and sometimes not. >> incredible story, incredible athlete. medal count, guys. norway is in first place with seven medals, not bad for a country with 5 million people. russia, canada, united states, tied for second with five. netherlands with four, which, by the way, did not crack the top ten for all of vancouver. tonight, great events, jim. you've been all over the olympics. you're more excited about this than anyone. speedskating. and willomen's alpine skiing, ja

mancuso. cnbc, 5:00. we have curling. that's huge. you'll hear a lot about that. all day long. and finally, jim, because it is your birthday, and because we know you love the olympics, slopestyle gold medalist, sage kotsenburg, he wanted to send a message to you. >> happy birthday, jim cramer. have a good one. keep it spice. >> keep it spice. if you have not heard that yet, you're going to hear more of it. >> you are too much, carl. i was looking that the twitter picture with jamie anderson, so jealous. i think our coverage amazing. a moment in downhill i said i cannot believe how long they're in the air. sure enough, a picture of a football field and showed you how much part of the football field they covered. that's the coverage -- and just -- it is riveting. i did watch almost every minute. it's riveting. people should be watching this. thank you, carl. fantastic. >> can't agree more.

i would add, every game, whether it's the pollution in china, the infrastructure in london, the security in russia, every olympics has a vacuum of news in the beginning, and the media fills it with a story line, sometimes of their own making. but by day two or day three, it's about the athletes and that's really where we are now. it's a good place to be. >> it is indeed. >> norway, carl, i'm jealous of norway. >> all raises to be olympians, every person. >> carl, do people say, darn old norway or do they celebrate norway over there? >> it's the one ter olympics. these guys, all they do is train for sports in the cold weather in the snow. >> true. >> it's huge for them. great britain also, first medal ever on a snow sport in the slopestyle as well. a lot of great narratives going on. we'll talk more about slopestyle and curling later in the show. >> all right. >> curling. >> a shocker.

>> the norwegians put out a good summer team also. i don't know how. carl, we'll see you later in the show. >> first on cnbc interview with vittorio colao, the ceo of vodafone. not going to want to miss that, coming up. about retirement. to you a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable, professional. would you trust me as your financial advisor? i would. i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard. instead of paying too much for an ipad, i got the surface 2. first of all, it comes with office and outlook. then, with free skype calls to phones in over 60 countries, i can talk to my cousins any time. and then, i got 200 gigs of cloud storage -- free --

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course, after what was the best two-day rally since october for the broader averages. and of course, s&p moves up 2.5% over the two days. we shall see what today and this week holds. up next, it's cramer's mad dash as we count down toward the first opening bell of the week. later, new york city comptroller scott stringer will join us at post 9, why he's urging apple investors to vote against icahn's buyback plan. more "squawk on the street" coming up after this. when i first started experiencing the pain, it's, it's hard to describe because you have a numbness... but yet you have the pain like thousands of needles sticking in your foot. it was progressively getting worse, and at that point i knew i had to do something. when i went back to my healthcare professional... that's when she suggested the lyrica. once i started taking the lyrica, the pain started subsiding. [ male announcer ] it's known that diabetes damages nerves. lyrica is fda approved to treat diabetic nerve pain.

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♪ because i'm happy

clap along if you feel like ♪ ♪ happiness is the truth >> like that song. we figured to stay seated may be getting news on carl icahn. yelp, key to the market last week, deal with yahoo! up another 9% today. >> people understand that yelp is part of the whirl, i talk about this in get rich carefully, of i know i'm going to get -- keep repeating this, social mobile cloud, because yelp is a great way to interact yelp is a fantastic, customer provides all of the contend so it's free live and die by yelp, look, i have a restaurant and inn. i check yelp every morning and every night as does anyone who has a small business, because yelp is make or break. this makes yahoo! more relevant, you always want to know that. jerome stoppleman is a genius.

he's the ceo of yelp and this tie-up is great for yahoo!. yell's going to 100. but it's yahoo! yahoo! is thinking about how to do more social and mobile, and boy do they ever need it. >> looking here, sorry, it does appear that carl icahn -- >> there is. >> he's giving in here. we're disappointed, last night iss recommended against the proposal. we do not together altogether disagree with the assessment and the actions taken by the company to aggressively repurchase shares in the market, i'm going it read more, which is going to take me a minute here. they point out that spectrum of options for allocating capital, we agree with the observation of the 14 billion in shares they bought back. trying to work down through the letter where it does appear that he is kind of say, let's see, additionally, pleased, the

company -- oh i think he's giving up glp it do. >> it does read like that. the stock will trade down. people think his endlessagetation will keep the heat on cook. >> here it is. sorry. i miss. the second to last paragraph. see no reason to persist with nonbinding proposal. interesting, here apple has combatted him carl is saying ke what you're doing. no longer the opportunity to get done. it's a beat-down. >> the two weeks alone, 14 billion. cites opportunistic and aggressive, two words he wanted to see, many of us wanted to see that. that means that cook understands how cheap his stock has gotten and is just anxious to buy it,

as you always point out, he did borrow money at the absolute low. cheaper to buy back stock and not bay dividend. it's a virtuous circle, those who have given up on icahn, step back. icahn's not giving up on it. icahn's given up onnage stating because he got what he wanted. >> he got a lot of what he wanted. one of the largest individual holders in apple. one would expect he will continue to speak up when and if he sees a reason to do so. >> right. >> that said, it is interesting to see how aggressive the company was. remember this all started with series of tweets, some time back, and followed by that dinner at mr. icahn's, i believe it united statwas, if i recall,. they've engaged with him but they have effectively deflated his arguments to a certain extent. if you recall, i think the key, though, jim, originally asking for $150 billion immediate buyback to be funded by larger borrowings. the company already borrowed 50

billion in spring. >> right. >> and he came back with the proposal at only 50 billion by the end of the fiscal year. give than what they have left this year to meet that would be 18 billion. >> right. >> yeah. >> they have effectively blunted mr. icahn. by the way, that can be a lot of management distraction when you've got icahn on your case. we'll focus on ebay, that would be a much more potent battle more mr. icahn where he may have support in terms of getting the company to split paypal division from its marketplace and he's, of course, going to be involved in a real proxy fight there on ebay. >> yes. >> as opposed to here where it was nonbinding. >> action that he wants, i believe would bring out value, we debated that. you and i have been debating value of twitter, herb greenberg saying, listen, you need more engagement with people who don't tweet. good "wall street journal" article, this is an example of

why i love twitter. i could not get this news without twitter. >> right. >> so i mean, yes, you don't need to be -- to tweet in order to have use fullness of twitter. twitter like solar city, likage ma done, can't be valued by traditional measurements but it's the future and that's an example why you need twitter. >> a great way to disseminate informationing but it's not clear it's for everyone which is a concern. we've had this conversation, ceo about the scaffolding around it, how do you get to the building. >> scaffolding. i point out, if they can make it easier, you would have no reason to sell the stock. >> when it comes to apple's cash, it's important to point out $142 billion. by the way, far and away the most of knit public company. microsoft next 176 billion in cash which represents 25% of its market value and 49% of its assets. so much held overseas. that debate faded in terms of hope for tax reform.

>> congress was thinking about it. >> fiscal 2070, 4 22% of the ca offshore. now 78% of total cash. when we have constant conversations about returning capital to shareholders, 78% of the 142 billion overseas you have to pay 35% on it. >> right. >> you're getting rid of a lot of value. why do it when you think there's a chance. >> you take the money and build infrastructure bank. these are the common sense things that used to happen in the country before the republicans and democrats started hating each other. i'm sure they agree if they weren't -- >> the last tax holiday, many say did not effectively do what it was supposed to. >> done without any thought of doing anything other than boost dividends, right? >> right. >> boost dividends and buy back stock. washington can't be creative. they can't do immigration. they can't do anything. let's face it. we haven't talked about the debt ceiling.

is that a gimme? >> there's so many different things. how about infrastructure bank? funded in part -- >> love that. that's what i thought -- >> put the capital in for that and start lending. here's some of the applause building here. there's that opening bell. new york stock exchange. >> my good friend, henry fernandez ringing the bell from msci. great, great ceo. >> see the real-time exchange reassembling itself there. we have more red than green. i can tell you that right now. unless my eyes deceive me. msci, celebrating china a index family. at the nasdaq, wolf of wall street, mr. peabody and sherman coming out in march. what? i don't know what that was. i just read it. i'm like will ferrell in anchorman. put it in front of me, i will read it. >> ipo, more of a focus.

that's been not a lot of ipos. a real slowdown in ipos. there were maybe too many last year, including biotech. very hard to keep track of. >> quite a few. listen, capital markets are quite strong, i think. yuf g you've got to remember, the debt markets, a lot of bond offerings, fairly strong. for merger and acquisition activity, it's another monday without any major mergers. a lot of conversation about potential deals or the lack of those or inability of those deals to happen which brings me to t-mo. >> you did a sherman-like smackdown and it ended the moves in the stocks, david. you said the fcc is not going for a spring/t-mo. >> we said they got a beatdown when they went there. this morning "wall street journal" weighing in, they have to reassess options. don't forget, an extraordinarily

aggressive gentleman, he didn't get to be the second richest man in japan by not being aggressive. the question still becomes, can you possibly structure in some way a deal that would bring along deutsche telecom, which controls t-mobile? possible to protect downside enough? structurally that they would be willing to take what seems to be a very large chance that regulators would eventually approve such a combination or not? is there a way to sign a letter of intent? is there a way to do a hostile, tender let'ses them go through the process if they were to succeed, you could follow through on the tender? i don't know the answers. i will sell you, he's not done and the arguments in favor are compelling when you think about them, jim, which is, yes, t-mobile has introduced a great deal of competition now. >> at&t has had a tremendous slide. >> but when you think about the duopoly with the two enormous

players, verizon wireless and at&t, and sprint and t-mobile are in terms of financial resources, their able to build down networks, bid effectively on spectrum, particularly 2015, when the broadcast spectrum comes up, is it enough? will they really be able to compete, i guess, becomes the question. massa son talked in private meetings wanting to bring speed. you have no idea what speeds are like if i can get them to you, but i can only do that if i have more capital, ability, spectrum to do it. >> are you surprised the telco business, that the justice department seems to step up? fcc step up. but the airlines have been able to converge. another upgrade today of american air of which i think all of us would admit raised the prices and it just doesn't merit any intention. >> yeah. typically, they are focused when it comes to consumers and prices, which is why, when you look at what t-mobile's doing,

how could they possibly say, now we're going to let you merge? >> look, the reason i throughout of it they made american airlines give up some gates. maybe there's some things they could do to make it so this would be better for the consumer. four of a kind really duking it out, brought the price of a deal down. i think that's very valuable. it's very difficult to try to discern your -- until you get that call from verizon that said, do you realize how much you spent? they did that. they did that for me with my kids. do you realize how much you spent this month? uh-oh. >> we ask you, last week, you were early in pointing out the turns we saw in some stocks that were unexpected and perhaps telling of a quick rally. >> right. >> which we got. what should we be watching in the market, jim? >> look, we have cisco this week. cisco's a performer in an absolutely on-fire group. a bunch of notes saying, be careful, they're going to have

to guide down again, that's important. whole foods, another upgrade today, raising that bar ahead of the whole foods quarter which worries me. dick's upgrade will make you feel you should be in north face. retail, retail, retail. that caused the decline and that's bringing things back. >> it's going to bring us back. >> watch amazon. amazon disappointed watch netflix which had been a remarkable performer last week. winners, google, netflix, highest workday, the highest gross stocks took off last week. and the cyclicals took off from people who believed it was a one-time only employment number of the week. we've got to watch cyclicals to see if they want hold the rally. oils, they had a big move. >> you're giving me a lot of things i've got to watch. >> hey what can i tell you? pioneer natural, pxd, that's a

company that says it's got the second biggest oil field in the world. there are a lot of skeptics, hear more from them. >> amazon is up. apple shares are up this morning as well. >> what do you make the fact that apple shares are up? >> "house of cards" not as strong. >> that's what you're hearing? people don't like it. >> "people" magazine gave it 2 1/2 stars. >> "people" magazine. >> 2 1/2. >> only 2 1/2 stars? >> that would wreck a restaurant. >> that's all he thinks about, the restaurant. the man eats a lot of mexican food. >> i'm focused on the consumer. when i was serving water last night -- you put the pitcher to the side. i can top off a medello, i took a pouring class in dublin. i have skill you don't know about. >> you skills that i don't understand. >> yes. >> you are richard sherman. >> i am like steven seagal, hard

to kill, superior attitude and superior state of mind. >> dominic chu, more on what's moving. >> i don't know if it's a good thi thing. i'm thinking of mexican beer. what we have is a market taken a breather. we are at session lows but the dow's down 24, 25 points. up vol oume 19 million shares. 35 million on the down side. look at the last week we had one of the best weeks for the s&p 500 this year, despite the fact that stocks took a tumble monday. that's a huge thing to watch for. also, just speaking with steve grasso, what it's like at open it's about what janet yellen says at her semiannual testimony tomorrow. a lot of risks haven't gone away. emerging markets a concern. he wants to see new highs in the market to validate the drop we've seen. a bully sentiment in asian markets, nikkei, shanghai xos t

composite up 2%. carrying into europe as well. a couple of things to focus on, retail side of things, check out what's happening with dick's sporting goods. this company we don't talk about of, it's bullish here, after they raise guidance on better same-store sales and bebe as well, it could be shopping it self-to private equity buyers. that's a reuters report. interesting story line for an otherwise wait and see-type morning. back over to you. >> thank you for that. let's move to the bond pits and rick santelli joins us from the cme group in chicago. take it away, rick. >> thanks. good morning, david. well, of course, after friday's big report, many traders wanted to see how the markets look on monday. you know, sometimes going into weekends, friday's can get a little iffy. unchanged, hovering below that 2.70 level, 2.68, whether you look at intraday or two-day, you

can see 2.70 is somewhat significant. if you open the chart up to november 1st, you can see how the right side and the left side are somewhat balanced. look at bunds, though, you can see the right side on the same november 1st chart, a bit lower. still propensity for potentially lower yields but momentum of yields moving down or purchases of treasuries, bunds have slowed a bit and that's key. one of the catalyst for slowing is more calm emerging market. maybe the reason for that is no margin calls right now. you know, it was really in many ways an eviction, forced liquidation. the dollar index, we can look at that but it's bettor pay attention what's going on with the yen, it's up a bit and purchasing going on in the nikkei. year-to-date of the dollar/yen or the euro yen, look very similar. though down for the year in terms of dollars and euros, we see they're making a bit of a

stabilization at current levels. david, back to you. >> thanks very much, rick santelli. up next, what the future holes for one of the world's largest wireless phone companies, vodafone's ceo vittorio colao here live at post 9 when "squawk on the street" returns. welcome back. how is everything?

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>> vodafone is the world's second largest wireless carrier. it will soon exit its long and successful partnership here in the united states with verizon when the sale of its 45% stake in verizon wireless closes on the 21st of the month. so, what is next then for this giant wireless company? well, let's ask vittorio colao, he is the ceo of vodafone. joins us here on the first on cnbc interview at post 9. nice to have you. >> thank you for having me.

>> a long time since you and i have talked on air. shareholders are happy with you, i will tell you having spoke to a number of them in preparing for the interview and in general with the price you got. the question, of course, all right, what is next for this company? how do you redeploy asset you are you receiving? much going to shareholder base but nonetheless, what's the next chapter? the next chapter is chapter three of the story. chapter one, creation of vodafone, chapter two, streamlining. now we will invest the biggest amount of money ever in the history of vodafone, 19 billion pound in the next three years on 3g, 4g, fiber, retail convernlance and pursue opportunities in opportunities in enterprise. it's an exciting chapter three. >> to the extent europe, not long ago, seemed to be ahead when it came to 3g, for example,

and has fallen behind because of the regulatory environment, is there going to be a change? a lot of people are focused on potential merger of 02 and. -plus, telephony ka deal, are we going to see more of that? are the regulators in europe ready to go 4 to 3? >> we're going to see more of that, david, because, clearly, this is a capital intensive business, and the fantastic experience of the u.s. or asia in the case that you need to invest, enable people to do more, consolidation one of the ways of doing. this crucial that the european regulator do not see as an opportunity this as an opportunity to impose new remedies or new undertakings, just allow the market to work. so fair competition, maybe locating spectrum in a balanced way, but then allow people to invest and create great business cases. >> if that's the case than it

has been in the past, what do you do? acquire, move beyond the deal, are you speaking to spain's ono about a deal. >> rumors over the weekend. >> yes. >> we continue to do what we said in our plan, investing, heavy in 3g, 4g, fantastic results of 4g, was not a surprise, because in this country it's already there. acquired a cable company in germany, investing in fiber in the home in spain. other opportunities arise to create bigger, the unilever of telecoms or a big company that has face, mobile, possibly entertainment and enterprise services. of course, we'll go -- >> that's an important thing you put out there. i mean, you would -- there's many believe you'll sell, that at&t will come around in six months or perhaps sooner and europe, you're going to continue

to create value by being a seller? >> let me put things straight. first of all, what will at&t do is a question for them, not for me. but what i am paid for is to have a robust strategy, which gives my shareholders good returns on assets today and assets we have today have great opportunities in enterprise, emerging marks and convergence. we have 16, 17% market share. we can go to 20, 21, 24. of course, somebody else has a better strategy or better ideas, i mean, my duty is to listen and compare opportunities. our strategy is great. investing $30 billion. i wouldn't invest $30 billion unless i were sure that we have a very good future. >> what about assets in places like yan and afriindia and afri? some believe why not split them off? the noneuropean assets should be separate? is that something you would

consider. >> we would consider things that make sense for our shareholders. three years ago, i was criticized for india, and people were saying india's a bad situation, why are you there? why don't you split it? now india has a margin higher than europe, we have a second position in the market, and everybody says, wow, india already presents the second largest data country of vodafone. i have to take the long-term view. emerging markets will produce good returns because of the data story, because there's no infrastructure in those places. if you want to have a business in india, you run it over wireless infrastructure. so, we will consider everything but, again, i am convinced we are in the right emerging market. >> given the concern of emerging markets and growth, are you seeing weakness? businesses. >> india growing 14%, data growth in india over 100%, fantastic performance in several african countries. so i think we have to watch.

we have to be careful. clearly, not everything is perfect in the world but look at the demographics, look at technology revolution. i'm optimistic about emerging markets. >> a lot of talk this morning about capital structure, given apple and icahn. after the post verizon dividend, you're going to -- one times leverage or something like that, why not take leverage up? >> we will over time. of course, i want to have time to look at growth opportunities, which could be both organic and inorganic. as i said, we're investing 30 billion in the next two years. >> that's in the network to continue to upgrade. >> yeah. we are considering, you mentioned rumor over the weekend. >> yeah. >> we are considering opportunity to get infrastructure in another set of countries and maybe there is some emerging market asset we'll look at. of course over the next couple of years, if we see those things do not materialize, we will return money to shareholders. >> you seem to be confirming

rumors about spain? >> i'm not confirming anything specifically but not excluding the fact that we might be looking at a number of places in emerging markets and maturing markets at opportunities. >> i'm curious, in terms of regulators' approach in europe to the u.s. carriers, as the nsa scandal, if you will, created a barrier to u.s. entry into europe? >> i think it has raised awareness of issues. i'm not so sure it has created any barrier. at the end of the day, it's interesting that there are three companies in the world who have taken a very -- the high grounds in this matter and have said, we want to cooperate with governments and we are good partners of government but we want to do it in a transparent way, and these companies are verizon, at&t, and vodafone. so i think we have the same position. >> finally, this is -- you're here in the u.s. but vodafone no longer will have a business in the u.s. does that make you sad? >> i have an office here. do you know i have 300 people

here? we still have the former cable and wireless business, the enterprise business here and continue to develop that side of the business. on the consumer front, at&t, verizon, sprint, t-mobile, they're big companies -- >> two are very big. do you think we should go from 4 to 3 in the u.s.? >> i don't have the sensitivity to the political mood around there. i, in general, think that these infrastructures need to become much, much bigger. so every regulator needs to weight the benefit of having consolidation and real high investment in infrastructure versus the need to have four players. in places like europe, three is more than enough. u.s. is big, you know. you can think about it. >> spending $30 billion, it's not easy to get a hold of that kind of money, thank you for your time. >> thank you very much. very glad to be here with you. >> vittorio colao joining us, ceo of vodafone. on the 21st is when that deal will be completed for verizon

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happy birthday jim cramer, boo-yah. >> you're kidding me? are you kidding me. >> more coming, baby. >> that is -- carl quintanilla has -- i'm dazzled! i'm watching these people and they're mepgintioning my name. are you kidding me? >> well known, if you haven't picked up on that. >> carl prompted. great things, that interview, do you know how bullish about europe i thought after the interview. >> really. >> congratulations on unbelievable get. investment -- these he's going to take the money, greatest sale in history and own europe. remarkable. he could own india. >> the question is whether at&t comes to their doorstep or soft bank says i can't get it done here. >> someone's got a head start. great interview. >> 6 in 60.

>> stock dropped after the quarter. mar morgue wi morgan stanley upgrade. >> st. jude. >> hold to buy. citi's talking about buying time warner, buying time sorry. time. >> which will be spun off in the future. rocket fuel. >> very controversial how do you put your ads programmatically all over the web? by an actual rocket scientist, go goldman says buy. >> fairway. >> merrill says hold. >> impossible to even deal with. regeneron. >> tock was at 310. talking about better visibility against blindness. >> today, we have curling. >> curling. >> love curling. >> not "mad money," curling. >> something else in the cramer

household which would be your birthday. >> going to a special restaurant. you're kidding me. i got the shout outs. >> love that. happy birthday. beautiful. >> i love cnbc. i'm sorry. i'm austerityhouse man. love where you work. >> we love you. >> thank you, everyone. >> "mad money" 6 and 11:00. >> no, tonight curling. >> that's all right. i thought you were curling. >> thank you. >> you were welcome. >> i going to have some. >> maybe everybody. >> i'm a waiter. these days i'm a waiter. >> he'll do it all for you. >> yes. i take your bags up at the inn and serve you dinner at the restaurant. >> they are nowhere near each other. happy birthday. scott stringer, came out against carl icahn, react to the invest

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welcome back to "squawk on the street." activist investor carl icahn now sees no reason to persist with his share buyback proposal for apple. in a letter this morning, icahn added he's supportive of the company's recent repurchases, hopes they will continue, and believes the stock is still extremely undervalued. icahn's response comes this morning after both proxy advisory firm iss and by the way new york's comptroller, scott strirng sa stringer were urging apple shareholders to vote against the proposal. it was nonbinding but would have been an interesting vote. comptroller stringer joins us now, right here at post 9 for ann a cnbc exclusive interview. 37 days or so on the job, welcome. scott, why were you against the proposal? >> the bottom line is, i thought it was risk wey and unnecessary. a big company like apple should not be responding to one investor, rather, the company's

board of directors must think long term about the value of the company. and as somebody who represents hundreds of thousands of retirees and has a large stake in apple, we wanted to make sure that by supporting the apple company rather than carl icahn, we would grow the company and we would put the company on a steady footing. i'm pleased that he was smart enough to withdraw, was a risky proposal. we believe unnecessary. >> any situations in which you can see reversing that kind of a stance becoming more active in part the way mr. icahn is on behalf of the pension funds that you represent? >> new york city pension fund is active. we do have a fiduciary responsibility to look at companies, board of directors. we've offered many shareholder resolutions. but in this case, it's very clear that apple was responding to investors' concerns about putting cash back, giving investors money and committed to $100 billion. why mr. icahn thought we needed

a $50 billion on that top gave us concern and pause. rating agencies were concerned, iss voiced concern. and part of my job, representing a large public pension fund, is to err on the side of caution and look for increased value over the long term because i have to protect the pensions of working people and i think this is what this is about. i'm not sure mr. icahn's proposal benefited anybody else but him. >> if this proposal wouldn't create value for apple but has over 1 billion in cash, what would. >> i don't think apple should be hoarding cash, rather giving back. they are giving back. they've given back 57 billion. but let's keep in mind, apple's a successful company. two of their products are responsible for over half of their cash. we need to give them a cushion so they can innovate and be competitive in a very complicated technology market. >> one of the central reasons why iss does not want -- did not

want the plan to go through is because of the tax situation. you referenced this in your letter, 78% of total cash is offshore if you repatriate it, your tax bill is 41 billion according to iss. would you support a change in the tax rules? would you support a holiday for firms to bring that money back and return it to shareholders? >> i think that's something to be explored. part of -- i believe large corporations should be paying their fair share of taxes, i do think that's an issue going forward. but in this particular icahn proposal, the bottom line for me was that this was an unnecessary risky proposal because apple was already returning money. >> you have been very active in the financial services space. many viewers recall last year when your predecessor did support a split of jamie dimon to split the roles and recently you've come out against bank of america and wells fargo and want to know what some of their

financial advisers are making, because they're managing i think 1.2 billion of the state's money and you wanted to see exactly what they were being rewardrd for some of the risk. why are you taking an active stance on some of the banks. >> that was the state comptroller. as the city comptroller we're responsible for $150 billion portfolio. it's always been to ask questions to product and make sure that the companies are doing the right thing. look, the end of the day, part of what we have to do as fiduciaries is grow the pension fund to make sure we hit our targets and wait to do that is to ask smart questions of companies and hold them accountable as best we can. >> a political element to you're doing? you're aligned with calpers, they too were against the proposal in an environment where ceos have spent a lot of money buying back stock generally, half a trillion in the market. equally being reluctant to invest in jobs in growth in the

economy. there a broader agenda for your pensioners. purely how the stock is performing, is it about economy and investment decisions. >> when calpers is aligned with the new york city pension fund we may be on to something but we agreed this proposal did not speak to long-term performance but rather it was a quick fix, short-term agenda for one investor. >> is there -- is there a broader comment on what's happening in the markets at moment. >> first and foremost, my job is to grow the pension fund. everything we do as a fiduciary what's going to grow the new york city pension fund. we're concerned about company growth, creating jobs, making sure that these companies have a strong financial platform by which to grow. that's why we recognize that apple should be giving back money, but also, in a timely, long-term view. so that we increase valuation so

i can go -- protect the pensioners not just retirees today but people who will retire someday. >> focus on the fiscal health of our cities and municipalities in the country. new york city the largest among them, 70-plus billion annual budget. pension costs have risen from 1.5 billion to when bloomberg took office to 8.5 billion right now that's astounding. it doesn't seem sustainable when you consider the percentage of costs on an annual basis given how much we're spending as a city. >> it's a critical issue and the new york city pension fund is certainly the costs have ballooned. every dollar that we're paying into the pension fund is not a dollar going to police and fire. part of what our new mayor hae has to do is look at how we get labor contracts resolved. in new york city, 152 labor contracts haven't been resolve in five to seven years. that's absolutely unacceptable. we've got to do better as a city. new york's not detroit. people want to come here from

all over the world. we're creating new kinds of jobs like high-tech and other industries that will create a robust economy and the good news is, it's not great news, is that our pension obligations are actually flattening between fiscal projected between fiscal year 14 and fiscal year 17. we have a long way to go and recognize this is one of those issues that have to be dealt with. but part of our opportunity with our new government, myself included, is that we're photog tackle these issues in a very transparent way. >> what gives you hope given this is a more left-leaning government than we've had in new york city in quite some time, there's an effective contract resolution with unions that doesn't result in significant increases in both back pay, pension costs, medical costs and everything that will make the city detroit? >> something i want to tell the whole world. you can have a progressive government, lift people up, educate kids, build affordable housing and at the same time be fiscally responsible.

being progressive and fiscally smart is not mutually exclusive. we'll recognize what we can do in terms of social services and building our people, but at the same time we're not going to be irresponsible. we're going to watch every dollar. we're going to root out waste and corruption in city agencies. we're going to be smart about investment portfolio and that's what we did today with the icahn proposal which has been withdrawn. >> but getting firefighters and police that you represent in the pension fund to agree to not have large contract increases or back pay is going to be a very difficult lift. >> that's what negotiation is. you engage in collective bashingen process, you don't negotiate in the media. i have a lot of respect for mayor bloomberg but the media negotiation with the teachers didn't resolve one single labor contract. in fact, it put us in some financial jeopardy. we have to now go sit around a table and do it the old fashioned way, talk through health issues, talk through pension issues, work rules.

but more importantly, we owe money to great city workers who make the city thrive and that's why you want to do business here. that's why the world comes to new york to visit and do business. >> there are 800,000 people in the city who don't pay tax. and not resident for tax purposes, they are the richest people in the city. can you look again at whether they should be paying some form of taxation beyond the low property taxes because it doesn't team fair. >> everyone should pay their fair share. when people who have great rewe and use our services, they're not giving back, that puts the whole city in jeopardy but also puts them in jeopardy because they're here for a reason, their economic future is tied to this great city. the city's like none other in the world. and when we -- when it's a fragile economy here it reverberates. we have to recognize we have to be smart about taxation and how we steward the city

economically. we're going to do that. >> all right. mr. stringer, pleasure to have you here. thanks for joining us. 37 days in. scott stringer, comptroller of new york city. >> coming up on the show, check in with carl quintanilla live, of course, from the winter olympics in sochi in a couple of minutes. also ahead, the price of bitcoin plummeting, falling 40% over the last week. we'll tell you why, when "squawk on the street" returns. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. impact wool exports from new zealand, textile production in spain,

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the street." 45 minutes after the open, the dow is down about 27 points. s&p, roughly flat, down one point. nasdaq in the green, up by five on the monday morning. we want to bring in chad morganlander, portfolio manager with stevele and the managing director with douglas c. lane. a lot of people, the day after, disappointing jobs report, trying find the silver lining in the market. the quit rate that's going up which some says a positive and you have the median forecast for unemployment, 6.3% by the end of the year. people are trying to cherry pick some ofs positives in the market. >> the u.s. economy over the year is going to grow around 3%. we think that the jobs market will accelerate, yes, we've had a speed bump or perhaps what one would call a pothole, but we believe the equity markets as well as interest rates will be higher by year end. and not only that but i'll throw

in that the global economy will continue to improve in 2014. >> we did see mcdonald's same-store sales come out this morning which showed really nasty numbers here in the u.s., down 3.3%, that's almost doubly bad as what the street was expecting. do you see that as a sign of general weakness here in the u.s.? what do you make of that. >> no, i don't. i think mcdonald's is different because as a company, i think mcdonald's is trying to find their way or generally if you look at retail sales. ones that are doing well, the high-end retail, we've had a couple of months where we're not sure what the weather's done but i do think, i'm in the same camp, i think we're going to get employment better, and when you see that you'll see trending sales get better, and the economy's going to be a slow growth, not slow, but going to grow but slowly. >> you bring up the weather. here in new york city, we had another snow last night. the worst is not over yet. people are using weather to handicap december. now handicapping january. now it's february we're still seeing the same thing.

how many times can you use the weather -- >> you're absolutery right. that's what people are going to look, is this a trend or is it a pause? but you have to look at other businesses that are doing well. we're looking at companies that are going to grow globally, top line. that's what you want to focus on. whether the weather comes in for one month or not, if that's a trend for certain companies i avoid those. sectors are going to grow, that's where i want to be. >> household credit is starting to grow, mortgage credit was contracting. last quarter started to expand. nonetheless, expansion isn't a -- it is moving forward. so, one or two months of disappointing retail sales, it's weather related. >> that really is the debate. usa today has an article that says everybody that believes during the course of the year we're going to grow faster. we disappointed for two months, first quarter growth forecasts,

even by these guys that they surveyed, are being cut. what point do you question whether the growth is strong enough to justify the rally you had last year? >> so the rally of last year, i mean, let's not be delusional about it we didn't have ebb lant economic numbers or earnings numbers in 2013. this year, though, you have valuation trading 15 times multiple. we believe that because of credit creation, on the household side and private credit creation, that will be the driving force for 2014. now, one or two months -- >> you mean households will borrow more and therefore spend more? >> exactly right. you're actually starting to see mortgage credit creation on the plus column where it was contracting. and that contraction was really -- >> that's for mortgages. it's different for people what that are stopped by unemployment, fear they may lose their jobs. >> not only the household side,

seeing it on the small and large business side as well as credit creation on the banking side. it's not ebulant. not looking at 4% gdp number. it's moving in the right direction. now in regard to the last two months, it has been somewhat slower. but you've had nice numbers on the q3 of last year, q4 of this year. a slow start to the beginning of the year but we believe in the second half you'll see improvement. >> he's right but be careful, buying the market 15 times is now how you're going to make money. you have to be specific. last year, rising tide, look at. if you see a current environment that actually gets extrapolated, they're the ones that will underperform in a big way. >> early in the year, so we'll come back to you guys on these points. thanks for joining us. price of bitcoin down 15 percent after it plunged on friday as well.

mary thompson back at hq with more on a controversial trade. >> the virtual currency taking the hit on the news of a software bug that hit the exchange. this is the second time in less than a year japan's mt gox halted withdrawals having done so for two weeks in the summer. the last halt to upgrade the system. this time, mt gox says it's due to a software bug exploiting a known vulnerability in the cur rent sy. the baug hug allows for duplica withdrawals in mt gox. under the protocol, each request unique and verified by the community unless a duplicate request is made fast enough to bypass the verification process. what this means, a person could request $1,000 withdrawal twice and receive $2,000 even though mt gox has a record of $1,000 withdrawn. mt gox says it's working with the bitcoin community to fix a problem, a some say has to do

with exchange rather than the digital currency itself. a slide on the price, more than on the other two bitcoin changes, btc-e and bit stamp. traders avoiding mt gox, some predicting the mt gox demise and one u.s. firm second markets to explore launching an exchange here in the u.s. part of an effort to improve pricing in the crypto currency and help validate it. >> down 21 on the dow. over to morgan brennan for a quick market flash. >> check out autonavi, the firm says it has received an off of to be taken private by ali baba, offering to buy the 72% of the company it doesn't already own for $21 a share, valuing the company at $1.45 billion. now that's a 27% premium to its friday close, autonavi currently at up to under 25% up at $20.63.

back to you. >> thanks so much for that. we have a live update from the winter olympics in sochi with our own carl quintanilla coming up next. but, carl, what's go on? >> sochi's a vacation destination since early 20th century. josef stalin had a house here, but it's hard to overstate impact of the games. russian officials brought unemployment here virtually to zero. more coverage of the olympics continues live from sochi when "squawk on the street" continues. [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york.

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shore was an eventful weekend in sochi with sage kotsenburg taking home the first medal for usa in the slopestyle event and after that gold medal he spoke with carl quintanilla live in sochi. a great start to a new event, carl. >> not too bad for team usa, taimon. as we kick off the first full week of competition, in fact,

the very first gold medal of course, as you know, went to an american, sage kotsenburg, winning gold in the event. the first american to win the first gold medal of the winter games since 1952, and he's the fourth american ever to do so. we caught up with sage yesterday and talked about both he and jamie anderson, one gold in that event. and why he improvised this move called the 1620 japan, and an amazing move. why le decided to do it at the very last minute. >> no, it's not anywhere near the plan pi. i kind of whipped it out of the bag, first run of the finals and ended up landing it. wish i got the grab better but, i mean, the spin enough is crazy. >> did you call your brother and ask if it was a good idea? >> yeah, i call made brother 15 minutes before. feeling to go 1620, like, why

not? and he's like, i think it's a sick idea, just send it i guess. i know you got it, man. like go have some fun. >> you went nine years really without getting to the top of the podium. >> yeah. >> how -- what keeps you motivated? you called it a megadrought. what keeps you motivated? it. >> not about winning. the thing about snowboarding, winning's cool but it's not everything. that's why it didn't bug me. i wasn't itching to be on the top of the podium every time. it would be sick, but it just didn't happen. i was having just as much fun. >> now jamie. >> i was jumping off my seat when she landed, running around my room packing, yes, yes, yes, yes! >> finally, spice. >> spice. >> for those, i mean, whole country out there who is learning this today. what is it? >> spice, it's just pretty much anything, man. you can say like, that trick is spice. that chick is spice.

you can really do anything, man. you can use it -- anything kind of word. >> yeah. so, spice is quickly becoming the key word of the olympics. here's the medal board, norway in first place. canada, u.s., russia tied for second with five. netherlands with four. tonight, curling here on cnbc begin at 5:00 p.m. eastern time. all of the often called chess on ice, it's trending in the u.s. on twitter. and canada is the favorite for gold there, guys. by the way, speaking of snowboarding and sage, they issued a special edition of the russian ruble with a snowboarder on it that's a picture of one that we got our hands on. that 100 rubles you know this, simon, worth $3 as the currency's come way off this year. central bank had to cancel bond auctions because of the environment we're in in early 2014. not trying to pay those excessive bond yields one of the

challenges that the russian economy has going for it going against it, even as the games go on. >> no doubt that will be a checker's item. you mentioned twitter last hour that the olympics start in a news vacuum but within days all of these mediums pop up, jokes like spice gain momentum. the most tweeted or most retweeted i should say tweet is johnny quinn from the u.s. bobsled team, i'm sure you've seen this, saturday morning when he broke out of his hotel room saying no phone to call for help i use made bobsled push training to break out and that has become a name all its own. ashley wagner, figure skater as well, the new mckayla ma ronnie with her face of disgust ended up not getting a score as expected. are they momentous on the ground as they are on the internet. >> as much as you are talking about, they're talking about it here. it's part of the narrative.

people love the athletes and this is part of what the athletes are experiencing. my favorite on the johnny quinn, a tweet from william shatner, captain james t. kirk, johnny quinn, you made your mark. when william shatner is tweeting about it the planet is talking about it. >> the entire planet is talking about sochi 2014. 1.5 million usages of that hashtag, incredible. twitter all important over in sochi. we'll get more from you next hour. stay warm in that 60 degree weather, if you can. >> all right. thanks. >> next, what do they call a quarter pounder with cheese in v vietnam? mcdonald's first ever mcdonald's in vietnam open for business. ceo don thompson a look at new store when "squawk on the street" comes back. heckup. the works. because when it comes to feeling safe behind the wheel,

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good morning. we're over an hour into trading. here are stories we're squawking about 7:32 on the west coast, 10:32 on wall street. shares of yelp rallying, the company struck a deal with yahoo! to incorporate listings and reviews into its search engine result. mark zuckerberg and his wife the most generous philanthropists donating 18 million shares of facebook to a silicon valley nonprofit, shares 970 million. and building blocks were the big

winners over the weekend, lego movie made $70 million beating "the monuments men" which made over 22 million. >> if you wanted a big mac in ho chi minh city, you're in luck. first mcdonald's in vietnam officially open for business. cnbc was on hand for the opening and joins us with more. >> reporter: mcdonald's opened its doors for business here in ho chi minh city, and the fanfare it created was absolutely huge with long queues lasting for days as local vietnamese got a chance to sink their teeth into iconic big macs and wlet het appetites even fur. can the novelty effect of the golden arches be sustainable? this comes at a time when many emerging markets including vietnam are slowing down as the fed tapers. but ceo don thompson is in it for the long term. >> whether it be vietnam, ma

labor shark sing gabor, south korea, china, we are investing in these market for the long term. we don't expect to just see a tremendous return on that investment year one or year two or three even in some cases. >> still, for a global business looking to this region for growth, managing currency volt tilt in the business can be challenging. >> phase one we will reinvest quite a bit in the markets themselves. so, you know, if we're growing in a certain market and we have revenues in that market, many times we're able to reinvest those, earnings in that market back into additional development opportunities. we try create as many suppliers and as stronger percentage of our supply chain as possible in the local markets. that gives us a natural hedge as well. >> reporter: currency volatility aside, vietnam represents a big growth opportunity for the world's largest fast-food chain with fast-growing younger population put together with a swelling middle class as incomes

rise, this could be what the doctor ordered for mcdonald's as they're facing slower sales. >> the view from vietnam. mcdonald's, of course, out with better than expected overall global sales this morning, as the company debuts there in vietnam. let's get insight into where we are. jeff bernstein and a senior analyst, restaurant analyst with morning star. good morning. >> good morning. let's just talk about the united states, jeff in particular, because, the figures here are disappointing. and it's not just january sales figures. we were down 1.7% in november. 3.6% in december. now 3.3% down in january. what is going on? is it pure le a weather effect or is it something more worrying, jeff? >> it's definitely more than just the weather, although weather, sounds like, impacted results by two full percentage

points. so, not to be dismissed, but even negative trends is not what we're used to. battling stiff competition just within the qsr space, let alone across the broader restaurant industry. >> acknowledge that they have a number of initiatives to turn that situation around, r.j. when do you think we might see a rebound? if we do, what will it be based on? which initiatives do you like the most? >> yeah, i think it would be later this year, possibly 2015. i like the idea that they're working with high density prep table, which is a modified version of their line from the back of the kitchen where you can have more kous tomorrowization, toppings, that will add a new level of innovation, something you can market more. something that will see an impact later. >> jeff, asia, middle east, africa the standout. it's a gain of 5.4%. i wonder to a degree which that

is because it was already beaten down, and now the trouble that everybody had in china with the chicken scare, so it flattens the numbers. >> that's true. other thing to note is that specifically in china, which led the asia market the new year shift benefited january but it will have a negative impact on february. come bin in addition of the new year shift and the lap of the chicken supplier issue last year makes it difficult to read one month and call it a trend in the asia-pacific business. >> looking at a plan on our monitor, it showed the breakdown of where some mcdonald's locations are. you have a little bit over 10,000 in asia-pacific including uae and 15,000 in the u.s. when you think about the break joub of mcdonald's 35,000 odd locations do they need to adjust the product mix where they're seeing strong sales growth. >> i think that's part of the

plan. they int introduced rice bowls, that will help resonate with local consumers. it's very much the focal point of mcdonald's strategy in the region. i think there's a longer-term opportunity in the regions. feel like mcdonald's is one of the few western brands, with the infrastructure and capital resources to build out and make, you know, tear through cities and china viable option and getting strong returns in the markets. >> in the meantime, jeff, recently the stock, which has been a poor performer, notwithstanding even over the last five years, the stock's resilient to the bad news and questioning will it is based and at what point it rebounds? where are you on where the stock could go, jeff? >> we would agree, i think most of the bad news is priced in. they did report fourth quarter results a few weeks ago and despite a fairly disappointing fourth quarter and as we've seen january being somewhat

disappointing, the shares have proven more resilient relative to the restaurant space and broader market. we can see it going north of 105 this year. i don't think mcdonald's is going to be anybody's best performer but to your point, we think you could see a bit of a recovery trade in '14 after what was a disappointing 2013. >> r.j. you're also 105 on your price target. is this the best pick in the space? where would you direct investors? >> it's one of my favorite picks in the space. you have an opportunity for turnaround here, even if it does take longer time. i think you've got the fact that it pays a healthy dividend, you know, supporting the stock also. the fact it's leveraged to europe, starting to see a consumer rebound there as well could make it a favorable trade this year, too. this along with yum one of our favorite names in the space. >> guys, good to see you. meanwhile, from sax to

bloomingdale's, high-end stores have their eye on growth. how do the brands protect themselves and profits? more on that when "squawk on the street" comes back. (vo) you are a business pro.

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this monday after last week's vol tim a volatili volatility. let's send it over to morgan brennan for a quick market flash. >> medicines company, down over 7%. fda reviewers are divide on whether the company's intravenous blood clot preventer should be approved. designed to prevent blood clots during artery clearing angioplasty and stent procedures. >> meanwhile, we want to head to chicago and see what is cooking with rick santelli on the santelli exchange. >> today we'll talk technical. it's interesting how everything was correlated with the margin

whipsawing and the evictions of many positions, whether it was carry trade, emerging markets or bleeding through of a combination of both. all extremes seem to have been played on the last day of 2013 and on the 3rd of february. take ten-year notes, at 2.67, extreme 3.03. that was on the last trading day of the year. low year close 2.58. february 3rd. the difference is 45 basis points times .38 for the tracement, 38% retracement, that equals 17. why is 17 important? we add that to 2.58 and get the retracement, a perfect retracement, actually, 2.75. let's look at five years. currently 1.46. extreme 1.74. low yield on the 3rd of february, that seems to be the extreme date, 1.44.

now, if we subtract the two, 30 basis points times .38, that equals 11 basis points. add 11 to 144, we end up with 155 is the key, 38 retracement yield. we shouldn't stop. the dollar/yen tied into that dramatically. its high water mark at end of the year 105.30. its low close 101 even, that was on the 3rd of february, for a difference of 4.3 points, take the 38% of that, well, retracement comes out to 163, add to the bottom, so a level around 102.63-ish. currently trading 102.14. highlight, if you're looking to see -- momentum has been broke, and that's why we're doing retracements, we've established the pause in the downside. for tens 2.75, 1.55 for 5s and 102.63 on the dollar/yen spread. i would say that this one is

probably the most important, that one's the second most important, and here's your wild card. why? the five-year seems to be the fulcrum on the yield curve. back to you. >> thank you, rick. rick santelli, monday morning on cnbc. next, aol ceo tim armstrong changing course on the company's 401(k) policy at a week of bad publicity. we'll explain in a moment.

we know we're not the center of your life, but we'll do our best to help you connect to what is.

big news from aol again. the company, this time, reversing its plans to change its 401(k) benefits match after a public relations roller coaster. cnbc's julia boorstin joins us to explain what is going on at aol. and tim arm strong catching a lot of headlines. >> that's right, simon. after a controversy-filled few days aol ceo tim armstrong reversed the companies decision to change 401(k) benefits from a pay per period to a yearly lump sum contribution. now, armstrong reverses the policy over the weekend, after listening to an outpouring of employee feedback about the

401(k) changes as well as the comments he made about two aol employees having distressed babies, costing aol over $2 million. he said, quote, on a personal note, i made a mistake and i apologize for my comments last making process around our employee benefit programs." the mother of one of those children mentioned by armstrong during the town hall spoke to nbc "nightly news" over the weekend. >> i think what he was trying to do was explain his justification for cutting employee benefits with this rationale that, well, we're spending this much on health care, it has to come from somewhere. and i think this was the wrong way to go about that. >> this all started this past thursday on cnbc when armstrong said changes were needed in part because of $7 million in additional costs from obamacare. aol tells me the decision to change 401(k) benefits to a yearly lump sum was made in august and communicated to

employees in october based on the assumption that employees would prefer that 401(k) change to higher health care costs. as for that $7 million increase from obamacare, we've asked aol for an accounting of how they came to that number. they say they can't give a specific breakdown. kayla. >> julia, it's interesting because $7.1 million for a company of that size doesn't really seem like a huge amount. one of the reasons i heard from a lot of people involved in this situation of why this was so controversial is because of armstrong's compensation. when you look at what he was making over the last several years, the last year we have available he made $12.1 million. before that he had around $3 million in comp. 2010, $15.3 million. 2009 when the company was still owned by time warner $25.5 million. and so it would seem that $7.1 million is a pretty small amount compared to what even just one person is making. do you think that this will have any repercussions for how the

board goes about deciding for his comp for this year? >> i think it's a bigger question about compensation in general. ceo's compensation is usually tied to corporate performance or stock performance. so based on the dramatic fluctuation in his compensation $3 million one year $25 million another year, i would have to assume without having the documents in front of me that that's as a result of the fluctuations in aol's performance. so i think it's more typical to have the compensation tied to performance than anything going on in terms of health care. but it does raise some bigger questions about how those health care decisions and compensation decisions should be made. >> whether people want to work for aol. if you say marissa meyer has made people want to work for yahoo, i'm not sure there's a refreshing honest way in which communicate with this stuff or brutality. it's certainly controversial, julia. >> it is, but aol has a reputation for having very good health care benefits and not every company does 401(k) matching which aol does do.

the change of matching per pay period or matching on an annual basis at least still does the 401(k) matching. >> for now, julia, thanks so much. we'll be covering this story throughout the day. julia borstin in l.a. high end department stores are struggling, which in turn means trouble for the luxury brands those stores carry. so how do they cope? courtney reagan is live at new york's lincoln center at fashion week with more on that story. court, over to you. >> that's right, kayla. the high-end department stores are really the largest distribution channel for many of the designers here at fashion week. and right now there's a level of discomfort with those planning their fall inventory levels. certainly there are macro issues going on with the consumers, but there are micro issues playing out across the high-end department store sector right now leaving some of these brands at a bit of a crossroads. while the higher end consumer is holding up relatively well, designers believe the high-end department stores aren't

undertaking compelling new strategies or new offers to improve in-store traffic and sales at those full-line stores. they're a bit more bullish on the outlet, off price and international growth strategies. the vice president at the notore company says outlets can bring easy sales, but it's short-sided growth. he fears moving merchandise into outlets or off price locations so in all can actually dilute the brand. >> brands like us that focus on distributing the high-end department stores there are additional issues for us to be wary of. there are really only so many places we can distribute these days and there's management concerns i'd say at all of them. >> and those management concerns go something like this, sax is working through its acquisition by hudson's bay company, subsequently an entirely new management team. neiman marcus recently acquired by private equity firm ares management. and bloomingdale's ceo retiring.

only high-end department stores without change in management but sales have been lackluster. the problem natori says is designers don't have a lot of choice for where they put their products. they want to be in the high-end department stores, but they want to see the traffic and sales come in. so they hope marketing from things like fashion week help drive the demand with or without the department stores. back to you guys. >> what are the highlights? what are you seeing today? what's going on? >> so the carolina herrera show just finished, very famous for classic looks but still a bit of an edge. she came out at the very end and you saw all eyes in the lobby turned and clapped even though we know she couldn't hear us because everyone was so excited to see her new collection. that's one of the highlights so far this morning so far. >> you look like you're having a great time. courtney, thank you so much. courtney reagan at fashion week. coming up, a new coffee shop

in los angeles is getting a lot of buzz, and it's called dumb starbucks. more on that in just a moment. [ male announcer ] the new new york is open. open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com. who found a magic seashell. it told him what was happening on the trading floor in real time. ♪ the shell brought him great fame.

♪ but then, one day, he noticed that everybody could have a magic seashell. [ indistinct talking ] [ male announcer ] right there in their trading platform. ♪ [ indistinct talking continues ] [ male announcer ] so the magic shell went back to being a...shell. get live squawks right in your trading platform with think or swim from td ameritrade. get live squawks right in your trading platform a 401(k) is the most sound way to go. let's talk asset allocation. sure. you seem knowledgeable, professional. would you trust me as your financial advisor? i would.

i would indeed. well, let's be clear here. i'm actually a dj. [ dance music plays ] [laughs] no way! i have no financial experience at all. that really is you? if they're not a cfp pro, you just don't know. find a certified financial planner professional who's thoroughly vetted at letsmakeaplan.org. cfp -- work with the highest standard. there's a new coffee shop in los angeles. it might look familiar at first

glance, but take a second look. it's a parody shop called dumb starbucks. it's apparently staffed by two baristas and free coffee all weekend. starbucks says the company has nothing to do with the new shop, but it is looking into it. in the faq that is posted on the sign of this store, apparently one twitter photo says a question is asked, is this a real business and it says, yes, but for legal reasons we have to categorize this as a work of parody art. >> why they may have difficulty shutting it down because it's a parody. they have got all products available. people waited an hour for free coffee. and i hear the baristas according to one tweet are pleasantly condescending. >> you can get a dumb skinny latte. they pretty much just put the word in front of every single thing that starbucks would otherwise carry. >> it's not nothing to start a store like that. we'll have to find out who the money is behind it. >> serious money. >> yeah.

about what the real end game is. >> before j gets hold of them. >> no doubt. you want to talk about apple as we take a look up 1.43%. we have just a minute here. interesting morning of course. mr. icahn, you follow him as well, kayla. he's a great poker player. part of that is knowing when to fold, not just knowing when to hold, i think. and in this case carl folds saying i acknowledge bought back a lot of stock already, probably will meet or close to meet the target i set anyway in my proposal. why bother continuing? >> so you don't think that signals any kind of defeat to you even though he bought half a billion dollars worth of stock? >> he clearly did not win this battle. no doubt about it. i will -- that is true. but he may win anyway because he does own $3.6 billion worth of stock. >> we'll see what he thinks of apple's products next year. >> david, thanks for coming back. enjoy your lunch. >> i will. here's what you've missed if you're just tuning in.

>> welcome to "squawk on the street," here's what's happened so far. >> there's some reason to be a little cautious in terms of putting the weight on the number itself. numbers move around a lot. we've seen it, but it was a disappointing report. what i think is disappointing in the number is that it's reinforcing the sense of the economy as losing some steam. >> who's getting hit the hardest are people who have seasonally high penetration right now. so your gnc and vitamin shops seeing tough trends because everyone's not thinking about bikini season, they're still wearing sweaters every day. >> we see no reason to persist with our non-binding proposal, especially when the company's already requests repurchase. interesting here, apple has combatted him effectively. and carl is basically saying keep doing what you're doing. >> now we will invest the biggest amount of money ever in the history of vodafone on 3g,

4g, retail convergence. >> i love that. happy birthday, buddy. >> thank you. >> wow, that is beautiful. >> i love cnbc. okay, i'm sorry. i'm a houseman. it's all right to love where you work. all right? >> bottom line is i thought it was risky and unnecessary. you know, a big company like apple should not be responding just to one investor. rather, the company's board of directors must think long-term about the value of the company. good morning to you. we're live at post nine at the new york stock exchange. let's have a check on the markets after last week's volatility have opened flat to negative. tesla hitting a new all-time high today. the stock rallying nearly 60% since touching a low back in november. over those fire safety concerns. the stock helping the nasdaq actually stay positive.

the nasdaq positive for the session overall. general motors as you can see is one of the biggest losers today on the s&p. the stock falling now over 3% down nearly 15% since the start of the year. >> we've got a busy hour up ahead. time for the road map which starts with janet yellen. she's set to take the stand as fed chair for the first time tomorrow. what does wall street want to hear? we have morgan stanley's adam parker joining us live to discuss that. plus carl icahn backing down from his buyback proposal for apple. so what's next for the tech giant? what should apple really be doing with its stockpile of cash? and crowd sourcing your fitness routine, or in my case lack thereof, how one start-up is bringing the gym into the digital age and getting millions in funding for doing it. this morning activist investor carl icahn deciding to back down from his apple buyback plan. the news comes on the heels of proxy advisory firm iss and new york's comptroller, scott stringer, who we just talked to here at post 9 recently recommended that shareholders vote against the proposal.

what could this mean for the tech giant and what else should apple be spending it on? who better to ask than jon fortt. apple's cash right now. >> yeah. >> how big is it over $150 billion? >> yeah. over $150 billion now. i guess when you factor in the amount that they just spent on buybacks, maybe it's a bit lower than that again. but they're making so much every week. it's a little bit hard to keep track. we just know as of last quarter. but tim cook, apple's ceo, got to be feeling pretty spliced this morning considering he won this battle before they even had to go to shareholders with the proposal. >> you said that so southerlubs. >> what do they call it a 620 japan. i missed the number in front of it. but i think the question though is kwha should apple be doing if anything besides just giving this cash back to shareholders. we're seeing an increasing number of tech companies investing in other companies either in their supply chain or

in kind of adjacent markets particularly overseas. cisco doing more acquisitions overseas because it also has a big part of its cash hoard overseas. you have to wonder should apple be investing more in a sharp, in a corning like we see samsung, its competitor, doing in both. we know they've invested in g.t. advanced technologies over sapphire glass. but there are a number of other interesting moves that they could make. >> scare people to death. >> yeah. >> one of the things iss says today it says reject the icahn offer is says tim cook is extremely disciplined in the way they use cash. and what people like is there isn't that m&a risk -- there may be many risk with apple, but m&a is not front and center. >> yeah, but consider he said to the journal last week he has no problem spending ten figures on an acquisition. that's the double-digit millions of dollars? apple can find that in the cracks of the couch. >> just because it has the cash doesn't mean it should spend it on an acquisition. >> it doesn't have to be an

acquisition. if you're investing in your supply chain in companies that buy you a better relationship, apple is spending that kind of money in advanced payments and on equipment with suppliers, maybe they need to make investments. >> in cap x there's been talk of apple going into new areas, do you see them spending some of that money to build completely new products altogether? areas where they don't already have a foothold? >> they already spend a dizzying amount of money just on capital, equipment, facilities, these kind of payments to suppliers to say you think you can do that in three years if i give you a half a billion dollars, can you pull that in to one year? but it will be interesting to see if they get even more aggressive about that going forward considering what folks like samsung are doing investing in competitors. >> all right. we'll leave it there for now, jon, thanks for being with us. tomorrow, fed chair janet jellen, new chairman of the federal reserve will make her debut on what we used to call the humphrey hawkins testimony. the two-day biannual testimony

to both houses. markets keeping a close eye on exactly how she responds to the weak data that came through again on friday. adam parker is the chief u.s. equity strategist for morgan stanley with a stunning new pair of spectacles. good morning. >> good morning to you. >> what is the base case for the market for the year? >> for us it's about 6% earnings growth for the s&p, couple percent buyback, so 8% total in the earnings growth and a little bit of multimillion expansion. so it gets us around 11% upside here in our base case. >> right. and how -- i mean, somebody wrote it's not the weak data we had on friday that's necessarily important. it's how janet yellen now responds to it. what do you expect her to say tomorrow, and how will that impact the market sns. >> i think the shape of the curve and slope of the curve matters for equities. so part of getting the market call right is guessing what's going to happen to the price-to-earnings ratio. i think that price-to-earnings ratio is impacted by the curve. so as long as you can dream the ten-year yield is going higher, growth is going to get better

and you won't move the front end in other words not going to ever, take a couple years or more move the front end, you have a nice runway for equities. >> basically if she does a holding style presentation that's good for equities. >> i don't see how the inflation data or the jobs data or anywhere near good enough to move the front end. >> one of the most popular questions of fed officials in the last few months has been do we see asset bubbles forming. janet yellen says not right now but if we do we will try and take action to correct those. with a 5% nearly correction since the start of this year, what happens to that line of questioning? >> i don't know. maybe the bubble is the belief in the policymakers. here we are about 3% from the all-time high for s&p, i don't think it's panic time to be honest. earnings looks pretty good, but i don't expect them to do anything other than remain accommodative for a long time. >> but the outlook does not look so good. roughly half of companies have revised their outlook to say 2014 actually is not going to be as great as we expected. >> i'll give you some historical

data on that. there's been 37 years that analysts have posted forward earnings estimates. 29 of those years their january estimates turned out to be too high. so i think a lot of investors know that people are optimistic unnecessarily. they're not necessarily worried that the estimates have to come down, what they're more worried about is could there be a recession. could the earnings collapse? so what we're mostly focusing on at morgan stanley is what could introduce volatility to the earnings estimates. if it's just optimism gone awry, that's normal behavior. >> are you relaxed about the world economy? are you not worried about deflation in certain parts? monetary policy in china obviously as important as the fomc. >> i'm worried about everything. that's my job. to me the highest priority fears, number one u.s. economy. once you start tapering, if you get a soft patch in the u.s. economy, it's hard to look you in the eye and say lower growth, lower liquidity, that's fine. start with the biggest economy in the world, that's the u.s. number two is china and the

banking system there, the shadow banking and trajectory of that economy. some cause day-to-day volatility turkey or argentina, i'm less worried. >> in the states it's growing and -- >> our base case is that the gdp will be slightly bet ner 2014 than 2013. anchoring saying when the market sells off, don't panic. >> adam, thank you for coming in. >> thanks, guys. take care. >> adam parker from morgan stanley. meanwhile, winter games are underway in sochi, russia. a country rich in resources including one liquid asset that russians consume billions of liters of. we're live in sochi. carl, over to you. >> probably won't come as much of a surprise but drinking is obviously engrained in russian culture. in fact, there's a word that describes a drinking binge that goes for several days. it's called zapoi and the drink of choice is vodka. at this big box retailer they sell literally hundreds of brands of vodka. this one's called green mark,

sells for about $7 a bottle. the most popular brand. but the government's trying to curb alcoholism. they're raising taxes on vodka, trying to kush consumption. one reason is the average life expectancy here is in the bottom 25% of developed nations. so vodka's made from fermented grains or potatoes. the literal russian translation is little water. it's about 80 proof. that's 40% alcohol by volume. it's the most popular spirit in the world, more than 4.5 billion lead e liters consumed every year. and russians drink ability half of that. 14 liters per person per year. coming in second place, us americans. but we only drink 1.9 liters per person, which means we've got to catch up. go team usa.

that was good. nice. one of the problems of those tax hikes, guys, on vodka is it's created a market for underground vodka. legal production in this country's down 30%. more tax hikes are on the way. and as a result a lot of cons e consumers are shifting to other spirits categories, which we know is a big, big thing after the suntory-beam deal earlier in the year. we're a few hours away from curling on cnbc. begins at 5:00 p.m. eastern time, goes until 8:00. it's going to be a lot of coverage over the next few days, a sport that is trending on twitter, has become a phenomenon especially since vancouver. in fact, it's such a phenomenon there are now calendars of athletes that are springing up, a couple years ago it was the women of curling. some of these calendars were rated pg. some were more rated r, shall we say. a lot of these proceeds actually went to the athletes because they are amateurs. and now, guys, yes, it's the

mens turn. we now have our first men of curling calendar. 8,000 copies sold. about $40 each raising about $100,000 for charity. in fact, i have one right here. you've seen a few of the pictures, but i'm not sure who's going to get this when i come home. but one of you lucky co-anchors is going to get this. >> you tease us. >> carl, i think you should give it to whatever producer had to throw you over their shoulder after that vodka segment. >> yeah. i mean, it might have been vodka, it might have been something else, but it sure looked good. >> i had a feeling about that. what's the most popular choice with that. moscow mule has become hugely popular here in the u.s. but what's for sale there in sochi? >> look at global the categories the biggest global growth is in irish whiskey. and jameson is a huge name.

i don't know if you probably know this as well, the second biggest gainer on the s&p this year is jim beam. so, i mean, if we can continue to see more consolidation in that space, vodka might have some competition on their hands. >> all right. carl, we know you're almost off the clock, but everything in moderation, okay? >> okay. yes, mom. >> thank you. we'll hear more from you a little later. carl in sochi. we'll tell you how apple products are making an impact behind and on the runway like never before. that's coming up when "squawk on the street" comes back. rick santelli, you're watching puerto rico today. >> i am. i'm also watching carl. i think moderation and moderation in sochi, you go, guy. as far as puerto rico, well, investors have already gone. and we're going to talk about what investors have to look forward to regarding the second downgrade to junk by moody's last week following s&p.

we're going to have matt fabian at the bottom of the hour. [woman]ask me...

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take a look at the health care sector, one of the better performing sectors in the s&p today in a market that's looking a bit overall defensive. dow down 39 points. back to hq for more on that. morgan. >> leading the way st. jude medical, upgrading to buy from hold saying it's poised to grow sales steadily and improve

profitability over the next few years. bristol myers also moving higher based on a more positive outlook for its pipeline. alexion, labcorp. rounding out top five. not google glass, apple products are being showcased like never before. courtney reagan is live at lincoln center in nyc with more. court. >> i got to tell you, kayla, i have seen two people wearing the google glass so far today. so i will say that i'm seeing more of a presence of that. but fashion isn't really one of those sectors that's been an early embracer of technology. though it does appear that it's beginning to change. so it's perhaps not a surprise that the company that's winning over the fashion scene is the one known for its sleek product and design as well as the one that's already known for capturing creativity. so ipads and iphones are being used by fashion both here at fashion week and in store every

stage of the process from the beginning sketches to actually capturing the action on the catwalk. paper by 5 3 is an app only available on the apple ios system. it's been used more and more allowing designers so sketch and share those designs. the founder says it's valuable to have those capabilities on the go because creativity doesn't always happen when you're chained it a desk. designer lauren scott actually used the app to design her entire collection here. ipads aren't just being used for the beginning sketches, but burberry has also used ipads in their stores to allow customers to order online, but in the store. and the company's saying in one of its earning releases that's actually helping to increase conversion and sales. so technology really being embraced by that mad for plaid burberry using the iphone 5s to

capture its entire spring show, using to capture, stream and later to edit. results actually quite impressive and considerable cost savings. we know burberry ceo angela erins loved apple's technology so much she left burberry to join apple as the head of retail business. kayla, back to you. >> maybe that's an homage to having her there. thapgs for being with us, courtney. what it's really like trying to open a hotel in sochi before the head of the olympics. why it was one of the most difficult things he's ever tried to do. you won't want to miss this after this short break. i'm beth...

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challenge it's been from a business sense for the hotel operators to set up shop there. here at post 9 is president and coo of interstate hotels and resorts. his company now manages four hotels in sochi, all of which were built from scratch for these olympic games. good morning. >> good morning, simon. >> how tough was it? >> i'll tell you, i've been in the business a long time. and i can honestly tell you it was the most challenging operations scenario i've ever seen. >> why? why? >> well, to start, when we got to sochi, a small town where the projects are being built, they were basically no employees. so we had to recruit as far away as siberia to bring employees in. >> wow. >> most of them from universities and schools. and then the second thing is there was no place to house them, no place to live in the area. so we had to find housing for all of them.

by the way, we have 780 employees now up there. the housing was an hour and a half away. so a daily chore is to take all these employees on a bus, bring them up to the resort for work and then bring them back again on shifts. >> wow, it kind of puts a different context to it. we've heard a lot of complaints about the hotels generally in that area. they maybe your hotels, they may not be, i don't know. how do you see that criticism knowing the effort into getting us to where we are now, if you like? >> yes. i think sometimes it's lost in what an incredible accomplishment it has been to build so much so quickly. as far as hotels go, most -- in our hotels we were pressured to opening the hotels at -- in a very fast period of time. sometimes not getting into the building until two weeks before. the exception was the marriott

hotel which opened in early january. >> our international correspondent michelle caruso-cabrera is there. and she said that one of the problems with the construction is that the media hotels were built last. and the power of the pen is sometimes forgotten. so when you have all the reporters in the lodging that has maybe no floor or they get locked in the bathroom, some of these instances that maybe, yes, the priority goes to the athlete. but maybe that should have been reconsidered as well. would you redo anything of the strategy of how you went about building these? >> i think it's always easy to look back. if you could have it another way, they would have been finished earlier to allow more time to set up operations. but our marriott right there is a spectacular hotel. and that's actually right next to the media center. so we see a lot of action there along with gorki plaza hotel, which is right in the area as well. >> i'm not sure if the entire site is owned by the national bank of russia spare bank but it

owns the hotels you're managing, correct? >> yes, the four hotels we own, they'red major investor. >> where do you see sochi moving forward? in part a project for vladimir putin and then you realize when you watch the opening ceremony that he's talking to the russian people and they may presumably come back and visit sochi. i mean, what sort of a market is it for you? >> i'll tell you, it's not a one-shot deal if you like. we have a lot going on. the g-8 summit will be there. there will be a formula one race. there are facilities there both in the new winter resort that is built and a major conference center, which is now the media center which will turn into conference space. there's a lot of draw there. for the russians -- >> would average russians go there on holiday? >> i think they will. right now russians go outside the country for much of their travel. i think that now that this resort is built they have

another place to go. it certainly is a tremendous resort when you look at all the amenities. and i think also the government commitment to the project will help long-term keep business flowing, tourism and conferences in that area. >> good to see you, ted. thank you very much for joining us. ted knighton, president and ceo of interstate hotels and resorts. meanwhile, the bells are about to sound across europe. we'll have the close and details on the impact on the u.s. and other markets. ♪ ♪ where you think you're gonna go ♪ ♪ when your time's all gone? [ male announcer ] live a full life. the new lexus ct hybrid with an epa estimated 42 mpg. the further you go, the more interesting it gets. lease the 2014 ct 200h for $299 a month for 27 months. see your lexus dealer.

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the european markets are closing now. >> europe setting up shop for the session relatively flat. bit of a disappointment. swiss voted to restrict immigration from the rest of the european union and that has a lot of people worried, not the least hedge funds based in switzerland. and indeed some of those big companies and a lot of discussion about the size of the holes in the european banking system with the front page of the financial times notwithstanding that some of these banks should be left to go to the world. interesting corporate stories, a lot of chatter about lo real. necessa nestle looking to sell out of its stakes. certainly l' oreal up. a deal with the chinese htc,

this is network levels, not handsets. basically competing litigation and there's a future maybe nokia will be working with htc. barclays also not so much with the results they came through with more with the fact it was reported over the weekend that 27,000 people have had significant data stolen from barclays a couple of years ago. it runs to about 20 pages of detail and was selling apparently for about $80 per person. finally, i do want to mention to you what is happening in the uk. horrendous weather over the weekend, storms like people haven't seen for 250 years. 16 flood warnings now in operation within the united kingdom as the tems rises in the united kingdom, the west countries absolutely flooded out. you've got railways washed away. astounding, astounding scenes, kayla, in the uk. >> for a country that is very

used to rain, they are not used to rain like that. >> this is unbelievable. unbelievable the sort of scenes you've had over the last few days. >> quite an image in the uk. thank you, simon. we want to get a check on energy and kmcommoditiecommodities. >> oil prices are holding up despite the downward pressure that we're seeing in equities this morning. albeit we are seeing light volume here at the nymex. west texas intermediate over $100 a barrel. we haven't seen that since december 30th of last year. we're also watching brent crude which is trading slightly lower today, that's because some protests have backed off in libya off of a key pipeline. production is now getting back to normal. so we're seeing a little bit of a pullback in the brent price. traders saying they are tentative, they are waiting like everybody else, to hear what janet yellen has to say. they want to hear what she says about qe, if not that what her tone is at least before they make any moves either way. meantime, staying with energy and talking about nat gas for a moment. you were just discussing the weather. we're actually seeing nat gas prices lower today under that $5

mark despite the fact we've got a bad storm supposedly coming here on the east coast. traders are saying that forecasts across the country seem to be a little bit more mild. and also there's a light at the entd of the tunnel, they're saying the heating season will soon be over because spring is on the way. that's a bit of good news. heating oil is lower for the same reasons as well. last but not least talk about the metals, gold, hanging up around the 1275 key resistance level. traders saying we've failed three times to close above it. they're looking for a close above 1278. if that's the case we could see 1300 as the next stop. if we don't make it and we go to the downside, we're talking about 1260. last but not least, want to talk about copper continuing its upward trend as well. that's on the back of more encouraging news coming out of the emerging markets and optimism on china. guys, back over to you. >> okay, thank you very much. the view there from the new york merc. let's go to the floor and dom

chu. >> that's right, simon. down 22. we've been in a tight range for the dow. you're not talking about a lot of movement but pick up where jackie deangeles left off. about 128 million shares to the downside right now. also, john at meridian equity partners said for a lot of traders it's not going to be as much as what's happening with the earnings picture or macro economic data, it is very much about janet yellen and her speech before congress tomorrow. that's going to be a key point. if you look at some of the caution flags up in the market right now, transports and small caps, they're already underperforming a bit today. that gives some traders at least a bit of pause overall. and if you look at where the upside movement is, it's in the defensive sectors, the less economically sensitive ones. think names like utilities, health care, telecommunication services, they're outperformers in today's market.

one more cautionary flag i want to throw up there because we've been talking about it so much over the past few weeks, emerging markets. look at etfs, down as well. the emerging market threat maybe not flaring up to a confully grags size but still little burners going on overall in the emerging markets are giving some traders the idea that emerging mashlgt markets aren't going away any time soon. what it comes down to is, yes, it's a market that's waiting and looking for what janet yellen says before congress tomorrow. back to you guys. >> thanks for that, dom. moody's joining standard and poors agency citing concerns on weak growth and ability to access capital markets. the front page of the "new york times" yesterday talking about the people texas and florida looking to find new opportunities, but, rick, what are investors doing to position themselves for this? >> well, i don't know that there's any easy answers.

many investors have already fled, which is evident by the etf for munis, which is basically hovering at six and a half month highs. i'd like to welcome our guest from muni land, matt fabian, thanks for taking the time this morning, matt. >> hey, rick. >> you heard kayla, as i look at the mub chart, should i be surprised there's been virtually no interpretation? >> it's too early. it doesn't have a monolithic response to things. it needs to happen over time as investors come to grips with what's going on. in particular with puerto rico which you're right for the most part institutional investors has been preparing for this, retail hadn't. where it doesn't affect the market, it's going to come out of the retail side of things. there's been a real split in that puerto rico market institutional versus retail over the last three days. >> well, where does puerto rico

go from here? i see that their tax collections are up a bit, but all in all their economy is slowing. all these things are piling up. can you give me an epilogue as to how you think this may turn out for those retail investors or some of the institutions that usually trade in distressed securities that have showed up? >> well, you know, the problem with puerto rico is that it's very hard to do exactly that. they do have an enormous amount of issues, short-term, long-term, economic and financial. in the very near-term over the next couple months they're going to try to scrape some money together in some form of a loan, some kind of a sort of solvency, you know, backing loan. either from hedge funds or from a traditional investors. if they fail to do that, then we could wind up moving more quickly into a restructuring phase for the credit. but they do have some time, you know, a few months to put together a some kind of financial bailout package. >> if i take a walk back through time and think about the auto

sector, and even though it's corporates, there was a lot of similarities when the auto papers started getting downgraded. we now have two out of three, s&p and moody's that have put puerto rico in the junk status. explain what the mutual fund covenants mean and what that may force some of these fund managers to do or have they done it with regard to liquidation? >> well, you know, in theory some funds could be forced to sell. and, you know, passive etfs probably will be forced to sell. for the most part that's not the case. most funds have the ability to not sell, you know, because when something gets downgraded while they already hold it. more importantly for the credit is that going forward they can't buy it, right? investment grade oriented funds can't buy things with two or three noninvestment grade ratin ratings. so that dramatically reduces the potential liquidity and the lender base for puerto rico going forward. it makes them rely more heavily on hedge funds, high yield funds and sort of other opportunistic

investors, which is a much thinner source of capital than the general muni market. it does make their challenges, you know, a lot more difficult. >> excellent. excellent. thanks for your insights, matt. it's what they own, probably can't buy anymore or that have alone worth the price of admission. thank you for taking the time today. kayla and simon, back to you. >> thanks, rick. due to a dispute over costs, a scheduled expansion of the panama canal has now been put on hold. and it could cost this economy dearly. we'll tell you what you need to know next. customizable charts, powerful screening tools, and guaranteed one-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and e-trade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity.

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at the top of the hour, is that it? is the correction already over or is there more pain to come? we're going to find out if traders are buying or selling this market. carl icahn dropping his aggressive apple buyback campaign. what does it mean for shareholde shareholders, and what will be the next move in the apple saga? and halftime going for gold, seeking out the olympic sponsors that deserve to medal. we're kicking off with our series today, mcdonald's in the news today. a perfect one to talk about. all straight ahead on the half. kayla. thanks for that, scott. on a same store sales day for mcdonald's i'm sure they'll appreciate you talking about the sponsorship as well. another side to that story.

meanwhile, dispute over costs is halting construction at the panama canal. it's a move that could cost the u.s. economy billions of dollars. but today there are hopes that this dispute could have a positive ending. jane wells is live in the port of los angeles with more on that for us. jane. >> hey, kayla. well, it depends on location. this is really one of the biggest stories right now going on in trade. and talks could resume this week between a contractors and canal authorities to try to break a deadlock over cost overruns for expansion project which has already had its deadline extended one. an arbitration board of panama says a full work stoppage could delay completion until 2020 though canal officials swear they will finish next year if they have to do it themselves. look at a live web cam down there. billion dollars in extra costs. so bad for panama, good for the west coast. ports like l.a. have been bracing for potential lost business once the expansion is done.

the l.a. port, i saw cargo drop last year, but it has been picking up strong. it's spending over $1 billion in five years to improve facilities to stay competitive, not just with the canal but ports from mexico to seattle. >> you've got to be out there in front of it. and that's what we've done. we saw it coming. we've investing over $1.2 billion in infrastructure improvements. it's working with customers on their logistics. how can they get it to market as soon as possible? >> beyond the port, stratford global west coast ports to east coast consumers, spending half billion dollars to improve facilities here though being sued over traffic and pollution concerns. if they're breathing easier on the west coast, kayla, what about the east coast where thai been spending billions to dredge and get ready for the bigger ships due to the canal

expansion? later on "power lunch" we're going to talk to the head of the georgia ports authority. >> thank you, jane. $1.6 billion doesn't come from nowhere, obviously that is a big point of contention for that situation. thank you, jane. meanwhile, let's send it to morgan brennan for a quick market flash. >> getting a little bit of a lift starboard value one of largest shareholders sent a letter to the company's chairman and ceo to the board of directors seeking changes. it doesn't believe the plan to separate red lobster is in the best interest of shareholders and calling for changes to the board to return darden. currently trading up to 48.80. back to you. >> morgan, thank you very much. coming up on the show, today's sport breakthrough is letting you crowd source your workout just by downloading an app. we'll explain when "squawk on the street" returns. [ male announcer ] the new new york is open.

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waistlines? ceo of fit mob. raj, as someone who takes considerable amount of motivation to tie on my sneakers, i'm interested in hearing just how this works. >> sure. what we realize is our nation, our world, has this huge inactivity and obesity problem. two-thirds of people are not fit. biggest solution out there is fitness gyms. $75 billion is spent every year globally on fitness gyms. and over 60% of people don't even use it. they continue to pay money. so what i found is that people -- that fitness is not about equipment. it's not about fancy real estate. it's about people helping people. what we're doing is bringing the community back into fitness. so you can use your app, find a great group workout right in your neighborhood with an awesome trainer, and use that community to get in shape. motivation is the big thing that we're solving here. >> but why do you think people would be more likely to join a group of strangers than by corralling their own friends together? >> first of all it's very convenient. second of all, they won't be strangers for long. you'll be getting together

physically offline in the world hanging out, working out, sweating together, going out for coffee together. you're going to build a sense of community. you'll feel bad if you don't show up the next time. >> raj, i'm curious. it seems like there's a lot of dimpblt models trying to disrupt fisness. you have cross fit, p90x insanity and what are you brings that's different and what is the tech angle here going to power growth for you? >> so something like cross fit has done a great job on community. millions of people are doing it. this isn't about creating a competitive program where you're aggressively trying to outdo each other. this is more about being inclusive and bringing the community in and doing it. and the tech angle of it is that you can use your phone to find out wherever you are where are great workouts and everyone's rated too. everything's right there. you can pay for it right from your phone. >> so, raj, i'm sorry, i'm still trying to understand what you actually do. this is about people communicating through social media as to where they should meet for a workout and getting that organized?

or is it something you participate in online? >> it's something you participate in offline. you go to your phone, click on fit mob, find the group workouts in your neighborhood that are actually occurring. you select one, you reserve for it and pay for it all via your phone and you just show up. >> it may be a great function, but i would have thought it's something a lot of other people could move in on. you don't really have a great mote around your business, do you? >> actually, there is a mote around the business. it's a network effect. we have the best trainers right now. we launched in san francisco. we're going to get the most users on it and that will bring more trainers. that builds a network effect. >> so, raj, i'm looking at some of the classes online. a lot of them are not safe to say even on cable television, but they do look quite interesting. they cost $15 a pop when you first sign up. that is less expensive than say a sole cycle or using a personal trainer. how did you decide on $15 and how does the actual pricing structure work? >> we wanted to change the way the model works. this isn't about a subscription where you go and it's breakage. this is about the more you workout, the less you pay.

once a week is $15. you go twice a week it's $10 each workout. if you go three times or more a week, it's $5 a workout, which is incredibly inexpensive. >> does it ever get to zero? >> never gets to zero because people get paid. you're paying that trainer. >> raj, my favorite gym back in silicon valley was a golds gym. i liked it because it was bodybuilders and old folks, down to business. $15 a month. this is still more expensive than that. so what about the gym rats who are just going to a basic place? are you not going after that audience? >> you know, this is about people with community and getting a personal trainer effectively to be helping you through the group workout and helping you achieve your goals. if you compare it to that, that's like $90, $100 an hour versus $15. >> but if i have a personal trainer at $90 an hour, i don't have to share. >> yes, but sharing is okay here because your community is helping you stay in shape as well as the trainer. that's a benefit. >> just got to keep the creepy guys out.

>> i'm not convinced myself. >> out of the groups somehow. one creepy guy showing up to the workout can kind of ruin the entire network. >> raj, what do you say to that? final word, do you have any screening process? >> we absolutely -- any time if there's someone disruptive in the community they can be asked to leave the community just like any other collaborative consumption service. >> the one place disruption would be a bad thing. i will say simon and i used to go to the same gym and you intimidated me. i had to workout on the other side. you're too good. >> well, what is new, what is new cheaper than used? i've been to that gym -- when it comes from tesla of course. we'll explain in a moment. a wog faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work.

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tdd#: 1-888-648-6021 so you can take charge tdd#: 1-888-648-6021 of your trading. welcome back to "squawk on the street." could it be a tesla model is worth more used than it is new? >> kayla, this is new information that comes from a search engine that looks at all the data of 45 billion used car

sales. according to ic.com the used price for a model s in 2013 was $99,734. what does that mean relative to what people were paying for a new tesla model s? forget about the msrp. the average transaction price roughly speaking for most of last year was about $93,000 for a new model s, which means on the used market right now the model s is going for more than the transaction price or what people are actually paying for a total in all out the door model s at a tesla dealership or through tesla. that compares with the chevy volt and the nissan leaf both seeing the used prices down about 14% to 19% compared with the new price. so it is interesting, guys, that when you look at a new vehicle like this, the model s, that right now on the used market they're going for substantially more than they are on the new markets. guys, thank you. >> phil, is that because the used ones already have the software updates or because you

don't have to wait? why is that you think? >> well, i think it's a little bit of both, jon. and i think the aspect of not waiting is interesting because when i've talked with tesla over the last couple of months, they've noticed that the wait time has come down substantially. i don't know exactly what it is right now. my guess is is that it's probably six to seven weeks if you go in and you order a new model s. but there may be some people out there saying i don't want to wait, i want to get it right now. >> yeah, right. >> i see a lot of people doing that because the stock is at $195 per share. it's up 5%. that's a brand new -- >> earlier today tesla hit an all-time high earlier today. >> thanks for that, phil. >> stock also worth more used than it was new. that's good for them. >> i see what you did there. that's a good one. meanwhile, we're looking at a market where the dow is off of its lows. it's -- down rather 18 points right now. just a couple hours into trading. the s&p's roughly flat and nasdaq still holding gains up 14 points. >> yep. that about wraps it up for this

show. jon fortt, thank you very much technology coverage as ever to a t. kayla, see you again tomorrow. >> sounds good. looking forward to it. >> as we hit noontime now on the east coast, let's hand it over to the "fast money" halftime report and of course to scott wapner eye on the markets. over to you, scott. simon, thanks so much. lots to cover today. welcome to the halftime show. here are the hottest trades of the day, going for gold. is sochi sponsored mcdonald's worthy of the olympics top prize? one of the traders makes his case and you decide. yahoo's yelp help. which will be the better result for your money? trading the trannies with the group down 3% this year. the top analyst in that space makes his top picks. joining us today pete najarian, josh brown, stephanie link, kenny with us as well from the floor of new york stock exchange. john with us today as well on what janet yellen will do on the hill tomorrow and how the market most importantly might react. we do begin with stocks coming off the first back-to-back 1% gains of the year.