share, comcast and time warner told us this morning they were confident that the deal will be approved by regulators. so, you're satisfied with the explanation on the no break-up fee now? that makes sense? >> it makes a little more sense. i still think comcast got the better of uwc. make sure you join us tomorrow. "squawk on the street" begins right now. and an historic day in cable as comcast agrees to buy time warner cable. good morning and welcome to "squawk on the street." i'm david 15er along with jim cramer. we are live from the new york stock exchange on a snowy day here in new york city. carl is in sochi where it doesn't snow. we're going to hear from him later in the hour. let's take a look at futures this morning, of course, we are looking for a down open as you can see. a fairly significant down open at this point.

as for the ten-year note yield, a couple of days now after yellen's testimony. she's coming back soon, too, though, right? ten-year note has moved up of late, 2.743%. let's take a look at europe. see how we performed there. as you can see, weakness there perhaps following probably some weakness here in the united states. and that is where we start with the deal that will create the largest cable company by far in the u.s. comcast the parent of nbc universal agreeing to acquiring time warner cable for $45 billion in an all-stock transaction. the deal values time warner at roughly $159 a share, before we open trading this morning. of course. comcast shares may be down ever so slightly. we will city. of course, that would impact the value of the deal. the deal trumps charter communication's recent offer which was $132.50 a share in cash and stock and had been

firmly rejected by time warner cable. charter earlier this week, of course, nominating 13 people to be on the board of directors as it began what would have been a lock proxy fight. but, in fact, time warner cable which had been encouraging comcast to buy the entire company for quite some time as i have reported, though, there was great reluctance on the part of comcast to do so. why? well, concern not on the anti-trust front not as much with the department of justice given there no caps on cable ownership but much more having to do with whether or not they can get by the federal communications commission without onerous restrictions involving a consent decree of some kind. eventually they were successful, that is time warner cable, in making the argument that it made sense for comcast to buy the entire company. and, in fact, it was only two weeks ago tomorrow that they had one meeting, rob marcus and brian roberts, about a potential deal in which i am told by

sources close to the situation roberts' attitude started to change about pursuing an entire purchase of the company. followed by negotiations that heated up in the middle of last week and ended with a ratio that both sides agreed on this monday and a deal announced this morning. still, it is the question of whether this will get by the federal communications commission that is certainly one both sides have to answer. here's what mr. roberts had to say in an interview we did earlier this morning on "squawk box." >> there's over four, in many cases five video competitors in every market selling all of the content services. the business is transforming every day with technology. it's a competitive business. a balance that needs to be struck between operators and distributors and content companies to bring consumers what they want. and i think this transaction will help speed up the technological innovation really really bring new products we don't overlap and i think it's under 30%.

>> the deal itself for comcast and i believe there's been a call that's already taken place this morning as well is seeing very positively as you might imagine by the company. they're saying they are paying 6.6 times cash flow to buy what is, of course, one of the premier cable companies with subscribers in los angeles and new york city, that would be 6.6 times after what they see as a billion and a half in synergies that will take place over three years, operating synergies, 50% of which those synergies will be captured in year one after the close. it is an all-stock transaction the decision made not to use any cash here while comcast does have a lot of debt, it's also extraordinarily underleveraged for a cable company but that has typically been the case for the roberts family in terms the way it approaches debt. it likes to run a fairly unlevered balance sheet compared to competitors. there will be a 10 brld addition to the buyback once the deal closes and concern will be used in that way.

it's seen as free cash flow immediately. what else? here's what mr. roberts had to say on some of the financial keys. >> to find a deal with this kind of synergy that can be accretive in the first year and to get about half those sinnynergies within the first year, the majority of them, that's very unusual. and that's because -- and that's why we did a stock-for-stock deal. we're in the same industry. we just don't operate in the same markets. >> and, jim, of course, they don't operate in the same markets. there is no overlap and there are no caps on ownership to begin with. but i've run up against in my reporting here after i first broke the news of comcast interest months ago -- >> congratulations last night on breaking, too. >> thank you. there was reluctance because of the fcc. it's an open question and they've chosen to do it. there is no break fee. to a certain extent think

at&t/t-mobile where there was a huge payment. what i'm hearing in part we don't want to put up a red flag and have a big break-up fee and the regulators will see it and say they don't have that good of a chance. it may take them a year but they're confident in the comcast and time warner cable camp they can get this through. >> just fabulous reporting. i think that the genesis of the worry is misplaced. the idea that there is overlap, no. i mean, you heard brian roberts say there's no zip code overlap. but if i were cbs or abc, i would be saying wait a second how are we going to be able to exact our fees from these guys? they're too powerful, will that not be the issue with the fcc, not to the consumer, but the forecast. i know you have les moonves on later. >> and i brought it up with mr. roberts as well because you're absolutely right. it becomes more of a political question when you get to the fcc

and the market power is no doubt a key consideration. it is interesting to know that they are saying that they will divest million subs even though they don't have to stay below the 30% cap that no longer exists and they are also talking about net neutrality and maintaining that even though that's been tossed out potentially by the courts and they are doing a number of things that they would point to what they believe is good faith efforts to convince the fcc that it is in consumers' interests and we'll see what leslie moon vers ves. >> it basically says, look, this is -- could be about a company that is better run than another company. now, i know i work for comcast, but there are overtones of all of this that the residential numbers for time warner were coming down. coming down precipitous, $2.68 billion to $2.53 billion and the

idea that this is additive and may be additive on a substantive level, too. >> yeah. this is not exactly an industry that's in growth mode. >> right. >> you know, i asked brian roberts about that earlier in our interview as well because this is a company that conceivably wants to expand internationally. might want to continue to expand in content. >> right. >> in terms of expanding nbc universal and seemingly moved out of pure distribution in part to be able to create some boundaries against the risk that it would have being all in in cable and yet they made this decision. i think in many ways, jim, they simply feel it's too good of a financial deal to pass up. if you can buy something after synergies at less than seven times its cash flow if you believe in the leadership of neil smith -- >> high level. >> and gets very well regarded and improve those and bring

xfinity to new york and los angeles, you still have an opportunity to create a lot of value and it doesn't mean you can't do the deals down the road. you are not using any cash. >> it's amazing. "mad money" is being preempted by a sport this evening. i want you to do a little lightning round. what does it do for directv and dish? >> i think you now look at what may be a national competitor in comcast and you say, okay, can we get a dish deal by the regulators? at least you got to start -- investors have to start thinking about that today, whether or not -- i don't believe there's any conversations about that, but these are the kinds of deals that spark thoughts. >> then cablevision. >> cablevision i can tell you from my reporting, jim -- >> you're close to it. >> i believe when this saga which we first brought you back in june began with charter and liberty having those -- that first foray to try to acquire time warner cable in the fall, let's call it late summer, fall, i picked up that cablevision

came to time warner cable and said would you consider buying us. so, my point is, they might be interested in consolidation. now, again, what i heard from people familiar with the situation is that time warner cable said you want too much. price is too high. separately i can tell you when i've talked to other people on the charter or liberty side, there's a lot of fios overlap with cablevision they've been fighting it out for years now. so the question becomes, "a," do the dolans really want to consolidate and could they possibly get their price if they want to. >> no break-up fee. charter, therefore, done, stock decline represents the accretive value that they thought they could get if they had been able to get time warner. >> and charter stock price has been up ever since we first mentioned this story in june. it has been up consistently as has the entire cable group, but even more so time warner cable and charter both adding significant multiple points to ebita since the idea of

consolidation first really came to the fore when we reported it and then, of course, following with many of the conversations. what does charter do? >> yes. >> i can tell you at this point i do not expect them to try to compete here for time warner cable. based on my reporting, it doesn't seem likely at all. the question, then, becomes what does john malone and liberty which owns 27% of charter choose to do given he believes consolidation is something that needs to happen. it is potentially happening just without help. >> and finally when you are discovery reported a number that i like or some people are tepid on it, or when you are fox, can you go to washington and say, look, this is -- we cannot offer the kind of opportunity, if you are bob iger, we can't do all we'd like to do with espn because this is going to cram us down and that means the consumer is denied espn or is espn able to raise the price every year, maybe this is the end of that? >> those are all important questions. one expects in these kind of things that the content

providers will get any piece of flesh they can any way they can even if they don't really believe that it's necessarily not in their interests to see this deal. to roberts' point there's no overlap. but to the others who would consider this to be a risky transaction from a regulatory perspective it's about market power as we said. >> fabulous reporting. fabulous. i saw when you broke it. and by the other, the other news organizes that attribute to other people, wake up and smell the coffee. great job. >> i did it on twitter. i've never done it. >> it wasn't david faber's hair, it was david faber that broke the story. it can't be. now i have to carl icahn and follow about apple. the company i work for, i have to find out from david faber. >> thanks. we'll see, of course, we'll have a lot more as we go through the morning. >> it's big. >> and we will be speaking with leslie moonves. >> a great number from cbs, they

increased buyback by a billion and a half with the outdoor spin coming up. >> what a great number he's predicting for retransmission fee. remember the tisches, talking about $2 billion in retrans. if i'm comcast i'm thinking, hey, les, i got some bad news for you in retransin terms of the kickback to cbs. >> that's a good point and that's why this will probably be fought out for a long time. they are talking about a close on the deal at the end of the year and many people expect it is rather optimistic. >> cbs is 615 shares. only autozone and viacom are up there in terms of the way they bought stock back. >> so much stock they bought back which has been a key in the media business. we are suffering through another winter storm in the new york area we're talking about snow and sleet and ice bombarding, by the way, the southeast before it got to us, hundreds of thousands without power, thousands of flights have been canceled.

the storm also causing the senate banking committee to postpone today's hearing on janet yellen that's why i was unsure about today's show. no, not today, part two of her testimony on monetary policy will be rescheduled. >> and will retail sales be rescheduledle? the january number. >> we can just keep blaming the weather. >> i will blame the weather but we'll hear from whole foods which talks about weather and competition. we've got a lot ahead of us in this show. >> and we'll get reaction to the comcast/time warner cable deal from leslie moonves. you just heard jim mention it live and exclusive interview, an interview with walter robb. we'll be talking to him right here on "squawk on the street." i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop?

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whole foods in premarket reporting quarterly earnings missed estimates and they lowered 2014 sales and profit forecasts. shares are down 12% over the last three months, did peak at $65. it was at $5 four years ago. for a cnbc exclusive walter robb co co-ceo of whole foods. >> hello, jim.

>> let's get to it. on the call said some things that concerned me, you readdressed, again, heavy possible cannibalization and major weather impact and increased competition but still we know sort of optimistic. here's what i worry about, walter, is there some sort of act -- secular decline or too much competition in your segment to be able to return to the halcion days of 7% comps? >> let's hope not. but i think clearly there's more selection of product out there in the marketplace, but i think the big news in the quarter is, you know, we actually had record sales of $4.2 billion. our comps really stabilized at 5.5% which is a good number and on its way back up in the first three weeks. we talked a lot about our price investment as being a strategy to lean in and particularly continue to build market share and the growth is very positive going forward with 57 leases signed in the last six months, so there's a lot of optimism

here in terms of continuing to move forward in the marketplace. >> let's go over that. i know you guided intraquarter doing it on an interview on "mad money" to 200 target stores and you go through repeatedly about the opportunities increasing and getting better. at the same time i got to drill down on this idea that there is just too much competition and i say that because we all know sprouts and we all know that fresh markets come in. we saw a better number from fairway and trader joe's and mackey said it's true there's a little bit more competition out there but the market opportunity is so much greater than it used to be. where are we in the balance? you have to keep prices low in order to keep the competitors out and that will hurt gross margins which you indicate may not be going up this year. at the same time you've got great growth. we'll try to figure out how to value your company. >> it's a fair question and obviously this quarter was disappointing for us as well. we're not just about price and competing and we're also about quality and the highest quality standards in the supermarket

industry. it's balance between value and quality and i think we make our way forward based on both of those not just on price. >> what do you think -- you know, one of the things i think we saw january sales today that were really heavily influenced, you guys, i've got to tell you, we are splitting hairs, i only has one retail that is better than 5.6 comps. let's talk about the idea that what you're seeing here is a broader increase in the companies that are doing natural and organic but that the concept is so great that we should forget about splitting hairs. stop looking at 5.2, 5.66 and accept the fact it's a major transition in our country that is long term, don't focus on this quarter but on the next five years. >> i think that's right. two things. yes, i agree with you. we're trying to say the opportunity continues to grow if you look at the numbers over the last five years and the growth in natural and organic double

digits compounded five years in a row and i think we're saying that we continue to be leaders in that space and we're going to continue to grow into that space and while there's some cannibalization in this growth space and while there's increased competition we're making the necessary adjustments to push our way forward and that's what we're trying to say, these are short term, we haven't seen the lift from these investments but we expect to see and have seen in the past the recovery from those on making our way forward. >> as someone who has covered your company for a long time, i'm happy to be interviewing you many times, i know you guys are very unforgiving on yourselves. let me forgive you on something. you did not ever stress weather. you talked about everything other than the weather, other than a quick throwaway comment at the top of your call. is it not entirely possible if we got some pretty good weather given that the linearity of the way that same-store sales were going it could be this quarter, this last quarter reported might be the trough in comp store die

cline declines. >> we're hopeful of that, the first three-week number was positive on the upswing. we've cited the difference in the average cost per price increase which we moderated on purpose. and we'll have to see. it's been a little unsteady this winter. we have to see how it all unfolds in spring. but i am slightly encouraged by the numbers we're seeing so far. >> let's talk about new store openings. when we went to the brooklyn store that was your best opening and subsequently trumped by austin. let's talk about new stores that are a year old. how is the progression there? because some people think do you know what the problem is, boston, chicago, there's too many stores, but if that were the case then the new stores would not be doing as well as they are. >> there's no question that's one of the leading lights of whole foods our new stores are opening, each one is opening and setting a new bar. we're opening at higher and higher levels coming out of the gate. really pleased with the performance of the stores and set three new record openings in the last month and a half.

we opened ten stores this quarter. we have another we'll do between th 32 and 38 this year and we'll hit 500 stores by 2017 and the new stores open at stronger and stronger levels. >> we all know that famously howard schultz lowered the boom on the idea of brick and mortar, strictly talking malls. can we get some sort of clarification on when you say the traffic wasn't so great? because i think that -- i'm trying to figure out average 106 basis point moderation average price per item versus traffic because traffic can improve unless you tell me, do you know what, jim, we're being amazon'd ourselves, we can't find where these customers went. >> i think -- i think it's pretty clear that we're in some sort of a shift in terms of the balance between physical retailers and cyberretailers but i think ultimately the winners will be those that combined the two successfully so it's hard to read through this last holiday

with the traffic in terms of the weather and the traffic and exactly what was happening, but i think we have a plan to continue to integrate, offer our customer choices not only by creating great experiences in the store, great experiences in the store, but by continuing through our partnership with square our other ideas that we're working on to give our customer choices that bring them click and collect delivery to the store, that sort of thing. i think we have ideas to continue to offer customers choices beyond the store as well. >> well, walter, that's terrific that you came on. i want to thank you so much. you've been forthcoming the whole way. you want to get back to the 6.7, i think it's possible. walter robb co-ceo of whole foods, thank you for coming on. >> appreciating the time. >> great for a xree to come on when it's not just good news and echo the thoughts of howard schultz key moment in commerce. >> you keep hearing about square not public. i don't hear as much about paypal, i hear about square even though ebay stays up there

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we got two minutes to the opening bell time enough for us to do a little bit of a "mad dash." you are paging through pepsico's earnings release. what do we know? >> i like the fact that they have $1.5 billion productivity. we've been seeing this soft drink market be really difficult. do i wish i had more organic growth in frito-lay? we get three. goes down to 2.5%. overall 7% core constant currency earnings per share growth in 2014. i will take it. >> 7% core, that's not bad? not bad at all for a business that's been around a long time. >> that's key. they say something right up

front, mr. pelt, please listen, pepsico value maximized retaining north american. remember, there's a lot of sense if you split the company up it will be worth more. i disagree with that. i think she's given her all she's got. i like the combination. do i wish quaker were better. i keep thinking what are you doing with quaker, down 16% that's not acceptable. frito-lay north america, plus 5%. when i say not acceptable, not to them, not me. i'm not in that business. frito-lay north america 3.5% is very nice. you are up against a very challenged carbonated business. the business is under attack everywhere, david. dr pepper opened up a buck and a half. it ended up being down as people realized it was only motts that was doing well. big buyback it's good. let's talk about one i don't like -- >> let's count down to the bell here and let's come back on the other side and we'll see how shares of cisco are trading

which i know you were talking about right there. and you've been outspoken on that one. nobody can mistake how you feel about it and the leadership of mr. chambers. but let's get to the opening bells here. you hear the applause. and there is the opening bell on this snowy thursday. the big board tower international, metal components and assembly. over at the nasdaq, a pharmaceutical company focusing on kidney disease celebrating its recent initial public offering. you can see the real time exchange back at hq in englewood cliffs, we are largely in the red. one of the big themes this morning, by the way, i've been focused on cable consolidation, i don't know if there's any news particularly that would bring about what is a fairly significant red versus green let's say on the big board. >> well, i mean, europe was definitely weaker. asia still waiting for some sort of trend. we tend to piggyback off of

those. we were talking turkey with the bond deal and it was frankly much cheaper than anyone thought so let's stop fretting turkey. and venezuela coming with a bond yield that's acceptable. what i don't like is the sense that weather is being not being asterisked anymore on the retail sales. give me a break. we've heard every retailer tell you it was bad and now we're supposesed to react to a broader number. i see some areas with too much competition. we talked to mr. robb. we know the actual retailer numbers aren't going to be so hot. i come back to cisco being the kind of thing i don't like to see. >> tell me. >> you know i like shakespeare and the scientists hope to sequence the dna of richard iii. in "the new york times" today. and what do we know about the beginning of richard iii now is the winter for a discontent, no leg to stand on, mr. chambers. you've got lower sales.

you've got lower gross margins, when is that something we want? there are countries, you do not get minus eight china without real worry there. look at these numbers apac down 5%. they are getting their lunch eaten by i believe alcatel-lucent of all things, okay? that's not good. jdsu -- >> whoa, whoa, whoa, alcatel-lucent is eating somebody's lunch? >> yes. >> that's impossible. >> they are monga cisco. you know, for cisco. identify don i don't like the quarter at all and john chambers has an attitude on that call of basically, hey, everything's good here, don't worry about it. and the amen chorus from the analyst i find to be exasperating, oh, more than ever it's about the bottom. you've got to like it. weakness, you know, hey, listen, good opportunity here, puts and takes. holy cow, i mean, they're

talking about a company that was a great growth company and it's not anymore. >> i do wonder in terms of activism with cisco one has to given how active activists have been when it comes to technology in particular. the company has -- this was -- i haven't looked at this latest quarter, jim, $37 billion in net cash and securities that represented about 36% of its assets, 32% of its market value. couple that with what seems to be underperforming businesses some frustration in certain quarters at least right here at this desk. where's something to mix it up a little bit on cris keye? >> i don't know. i don't know what they could do. the product gross margins -- >> what do they do? >> shrink to grow, obviously they don't think that. gross margins hitting a 12-year low. emerging market orders down only 3% is regarded as a positive surprise. we've been spending a lot of time talking about service provider and spending. down 7%. they are not getting their share

of spend from verizon, from att, from sprint. they're just not getting -- >> are they losing share or -- >> yes. >> they are? >> they are losing share. there's data center business that is going away from them, that's the alcatel-lucent and i come back and i keep thinking why does he get this pass? why does he get a free pass? like, almost no other executive. and why does he -- he says things that just drive me absolutely bonkers. he's talking about -- talking about basically being -- change has always been good for cisco and our track record for transforming ourselves. it's a company is unparalleled. david unparalleled, you use that term when you're a winner! >> to be fair he has been a winner many, many times and he has come back -- >> so was willie mays! >> willie mays was the greatest but we've already had that debate. >> remember that throw? >> it was over the back and 16 home runs, he's the greatest but -- >> do i want it to be better? of course, i do. people own this stock. do i want the analysts to wake

up and say, do you know what, let's challenge on the call the way they did on some of the most recent calls even on ibm. i think it's worthy. do i want to own cisco stock, i say give me a reason. i can't think of one. >> all right. let's look at the cable complex if you will and the broader distribution of programming in the country. a lot of different stocks to go over, of course, given the news this morning that comcast is in a deal to acquire time warner cable. the deal had a headline value of 159 bucks a share. it's come down a bit. time warner cable right around $146 it is up. it is a nice day for time warner cable but there is, of course, a spread to the implied value of the comcast deal 2.875 shares of comcast, first of all you do that, and multiply it by $284 million if you want the overall dollar price. but more importantly it will take a while. they are saying the end of 2014. many others i've spoken to believe it will be longer than that and then there's the larger

question whether it will be approved at all which becomes something of a political question. it's not as much about the doj as it is as much about the federal communications commission, how will it approach the questions of market power, diversity of voices, all these different things that it takes into consideration when it approves a deal. for its part i would note shares of cablevision are up a bit this morning. this just simply on the idea, well, maybe there's more consolidation to come. what does charter choose to do. charter, of course, is down sharply almost 9% as i reported earlier, yes, there were some conversation between time warner cable and cablevision. cablevision saying, hey, we would consider giving you a white knight opportunity here, you buy us and you can avoid charter but the price was too high. they did not pursue and directv is up. >> i thought you would point to those because people are saying, hey, we're next. charlie ergen you know him, does he really think this isn't the golden opportunity to also make a move himself? >> i think it's more important

if directv believes that they can get this deal by. remember, they tried once before many years ago. >> right. >> and there's a great deal of management time and effort and distraction that goes into a deal that falls by the wayside. when it comes to the comcast deal, all stock, no break fee. some saying, well, that's just a free call as you put it on the part of comcast. others will say, hey, you know, this is -- this is going to be a lot of work. they wouldn't do it. brian roberts would not undertake something like this if they didn't think they could get it by. if you can put in a 3% break fee, what will it do for anybody? i believe more on that comp but it is interesting to note if the deal were not to happen it would not cost either side anything. there's no reverse break fee if charter were to come around with some crazy bid which, by the way, is not going to happen. >> don't you think it's interesting when you look at the overall market that reacts to maybe some numbers in germany that weren't so hot, overall market reacts to what's going in

asia. they do not react to the fact that this is a stupendously large deal that basically says this company that had been going up for weeks time warner cable was worth far more than we thought and cbs it's case by case, but the overall market reacts to, what? to the fact that it was cold and wet? because you heard walter robb, he is not an excuse-maker. he would not say weather's bad but traffic -- was willing to bring up the secular call that howard schultz is talking about. but overall, david, the numbers we're getting spx, spx yesterday, really terrific. valspar really terrific. why do we care about these? that says that housing and industry doing well. i keep coming back to the idea that the market's too negative versus the facts, aerospace doing well but we see the airlines going down. how about the fact how many cancellations can you handle? and american airline distribution. i don't mean to be -- give you too much of a pastiche but the companies aren't saying anything negative and they are valuing on other companies in their sector

as being positive but on a day like today, i don't want anything to do with it. >> to the tent you get a $45 billion deal it's usually a vote of confidence at some point to your future. i'm reading from a ubs note, the new company would dominate the cable industry and broadband services with 84 million homes passed, 73% of u.s. occupied households. 33 million subs, by the way, and a willingness to divest 3 million to get below the 30% cap that no longer exists. we saw shares of cbs increasing the buyback by a billion and a half. the upcoming offering of their outdoor -- outdoor business where they put some debt on which is then going to be used to buy back stock before they spin it out. that is up. but i'm not seeing a lot of other green on the screen. >> no, there's not. but i do see some text stories coming. what's interesting, david, shows you how this comcast deal colored everything. there was an article today

basically saying that comcast was going to go up against netflix, so before you get a deal you start thinking, well, how much will netflix be down. here's a charmed stock netflix is up a dollar 50. >> what about the idea of facebook or google going up against netflix? what about the idea of continuing in terms of branded content a la "house of cards" what stops a facebook or a google from trying to do that? google on youtube and facebook on its own platform? >> because the opportunities are so great for just classic advertising, they don't even have time to deal with these crumbs. >> really? it's just not worth it to them? >> no, not right now. >> to go down that road at this point and spend $150 million on some incredibly impressive thing and put themselves in the video. >> if you were at google and facebook here's what's happening, the phone is ringing. you're taking orders. do you know most times you have to call to get advertisers? no, advertisers are calling

facebook. they're calling google. i don't even know if they have the time to even think. now, there is a brain trust. there's the skunk works, there's the manhattan project within both these and i believe that google looks at this deal. we ought to go content because comcast might be too hard to go up against. or facebook says, do you know what we'll do, we'll become the ultimate network for younger people. let cbs have the older people, les moonves hates that. under the dome, i mean, the guy is a hit machine. >> hit machine. >> does bob iger sit there and say he has more hits than i do, or does he say he's doing well, i'm doing well. i'm okay, you're okay. >> i'll always have 80% of espn, nobody else has got it. >> look, we have entertainment companies that are making fortunes and distribution companies making fortunes and let's not lose sight of the fact that in the end if google decided they wanted that nfl contract they can outbid anyone with $65 billion in cash.

>> indeed they can. all right, let's get more on the action from mary thompson who joins us from the floor with the s&p down 0.44 percent. >> we are seeing data overcome or i should say overshadow the big deal, of course, today that being comcast bid, the parent of nbc, for time warner. i'm standing right by the time warner booth here. we want to just point out that it's up just over 7%. it's down a little bit from the open. now trading $145, of course, comcast bid four time at $158.58. as david pointed out the markets are lower today on concerns of the retail sales numbers for january, lower than expected. also the december numbers revised downward. that prompted barclays to come out and actually cut its esmeat for fourth quarter gdp growth and expecting to see growth 2.2% in fourth quarter down from its previous estimate of 2.6%. despite that data we are seeing yields in the ten-year climb a bit. they are off their lows. they've actually rebounded a little bit below where they were

yesterday. still rising a little bit. one thing we're watching today is the yen. because we've seen strength in the yen, and keep in mind strength in the yen is typically correlated with weakness in the markets, that's one of the factors at play today, again, despite the good earnings news that we've received, despite this massive deal in the cable industry. couple of companies we're watching in the wake of their earnings, burger king coming out with very strong numbers, expected to open or opened close to a 52-week high. skechers adding to the gains of 54% that it's had over the last year because of those stronger-than-expected results. cabela's, this is a seller of guns and firearms, weak ammunition sales and sales went through the roof on concerns about additional regulation. didn't happen, that stockpiling has ended and its sales were hurt. just want to end with generac benefiting with higher sales of generators with the winter weather. >> thank you, mary. let's move to the cme group in chicago. good morning, rick. >> good morning.

and good job on all that reporting, david. it's so nice to get all this information so quickly. you know, if we look at what's going on pretty quickly in the interest rate markets, you know, we've had several sessions where rates were moving up. the foundation of that was that equities weren't making everybody prespire, if you look at intraday of tens and fives, the tens leading the charge on a drop in yields much propagated by weak retail sales and a bit of a jump in initial jobless claims so it makes it look like there's curve steepening going on as you see on the fives and tens chart. but caution, there was a roll on the ten-year yesterday so there's a little new guy/old guy going on that may distort that a bit, but all lights once again pointing to the fact that maybe rates after quickly challenging 38% retracements yesterday may not be long for higher-end-type trading. we need to monitor that.

and what do we look at when we monitor that? well, of course, we look at some of the currencies. if i first start looking at the euro versus the dollar there's some big moves there to be sure, but the real trade is more or less against the yen. now, as you look at the dollar/yen year to date you can see that the yen is doing better today and that seems to coordinate with lower stocks. less carry. more observation of the carry and the leverage. but as you look at the euro versus the yen, even though it's a similar pattern, the euro's actually holding up better and that's reflected in the euro versus dollar trade as well today. david, back to you. >> all right, thank you very much, mr. santelli. want to get to chicago and phil lebeau has breaking in u.s. on gm. phil? >> david, we got a big recall being issued by general motors, the company recalling 619,000 m models 2005 to 2007, primarily the chevy cobalt. the recall is due to an ignition switch that may fail to send a

signal, a proper signal, to the air bags for those air bags to deploy in the incident of a crash where the air bags should be deployed. general motors recalling 619,000 '05 to '07 models, again, because the ignition switch may not send a signal for the air bags to deploy. we do know there have been some deaths and injuries related with this recall. we'll have more information throughout the day and we'll let you know about it. david, back to you. >> all right, thank you, phil lebeau. coming up a first on cnbc interview with cbs's leslie moonves and we'll ask him for his take on the time warner/comcast cable deals. but carl joins us from sochi with golden nuggets on the winter olympics. "squawk on the street" will be right back. (vo) you are a business pro.

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people say i'm too hard on chambers because he gave you a big dividend boost and buyback, let's give him that. big headlines out of sochi and carl is live from olympic park with the very latest. i saw you skiing this morning, you know, i don't think you're going to medal, but maybe i'm early. >> reporter: no. i'll be lucky to survive that run. hey, jim. what a night last night, the u.s. has made progress on the medal count. a lot of that is thanks to the ladies on the half pipe, take a look at kate farrington and kelly clark taking the gold and bronze. actually beating out the last three gold medalists. and, you know, there's been so much talk, guys, about the half pipe, about the conditions, about whether it was constructed well, about the consistency of the snow. we caught up with both of them and we asked them if the conditions are affecting the races and whether athletes

complaining about the weather, complaining about the sunlight are just making excuses. >> for our first couple of practices, the pipe was really challenging, you know, and it was kind of last night was a great surprise because when i was in second heat when i came up to the top of the pipe, first heat girls were, like, you are going to be so stoked about the pipe today. so it was a great surprise that they really pulled it together for our contest. >> reporter: all the gold obviously for the u.s. are snowboard gold. should we be worried about the rest of team usa? >> i don't think so, it's only a few days into the olympics. i think we'll see a lot more gold coming our way. >> reporter: and, you know, she is absolutely right. here's the medal board, guys, in a spoiler alert we did sweep in slope-style skiing this morning so that means we are one behind norway with a dozen. norway has 13. there's canada, netherlands and russia with ten, ten, and nine. finally, guys, it is crunch time in curling. the u.s. women are on the verge of elimination in the round

robin. they've got an 0-4 record. the men finally did get a win against denmark but they're ranked seventh and the best four teams from the round robin advance to the semis. so that's going to be one to watch, of course, curling begins today. 5:00 p.m. eastern time right here on cnbc. and there have been some huge audiences for those matches as you guys well know. >> carl, you've been talking also about ice hockey and where we stand in ice hockey. of course, we all remember the great olympics that we've just sometimes try and -- what's the feel? >> reporter: well, obviously first games today. they play slovakia, we'll try to catch up with either the russian or the u.s. men tomorrow. you know, ice has been a challenge for us this whole game. shawne davis yesterday placing eighth. bode miller placed eighth in the downhill, julia mancuso placed eighth in the women's downhill, ice has been a challenge as well as the alpine sports.

hockey, jim, you name it, all the politics around 1980 the fact that we are now on russian soil, the russians have big incentive to win but, of course, so do the americans. >> all right. carl, i notice you went with a tie today. he's always surprising us with his various accoutrement. >> reporter: you got to shake it up. i miss post nine, maybe that was it. >> we'll have you back sign, i think. you'll be back soon. >> reporter: i'll see you after the holiday. >> could you be in a t-shirt? >> reporter: today you could. 65. >> oh, man. same here, carl. same here, 65. >> that's something putin let us down on. he's very powerful but he hasn't delivered. >> we'll see carl later in the show. jim's 6 in 60 coming up next on "squawk on the street." [burke] at farmers, we make you smarter about insurance.

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company, apple. >> jeffries says risk to iphone. stop it already, analysts stop trying to game the iphones. you failed, you look like fools. >> cabela's fourth quarter. >> ammo down, one of my favorite stores to shop at. be careful. alliant tech, atk which has been more than a double in the last 18 months. ammo down. >> all right. deere, yesterday deere reported -- >> well, deere was one of those turns to tragedy, it was up here and people bought into the idea. go to the "journal" today, they talk about ag prices. land coming down. that's what's really secular turn against deere and also it's not up anymore. >> coming up the ceo of zillow. >> he's talking about being a media company. people didn't like that. they just want oxygenated growth without having to spend money to get it. sorry, charlie, you taste good in zillow. >> you get another night off.

do whatever you do. >> two tables i had to bus. >> do you drink any tequila while you are behind the bar? >> are you kidding? you are working. we had a dish a vegetarian lasagna. we have big vegetarian dishes. >> jim, i'll see you tomorrow. glad you braved the snow. >> great job on comcast! >> thanks, buddy. latte or au lait? cozy or cool "meow" or "woof"? exactly the way you want it ... until boom! your mattress a battleground of thwarted desire. enter the sleep number bed. an innovative design that lets couples sleep together in individualized comfort. he's the softy: his sleep number setting is 35. you're the rock, at 60. as your needs change, you can adjust your sleep number bed, so you can sleep better together. visit one of our 425 stores for the the largest closeout event of the year with 50% savings on innovation limited edition beds. know better sleep with sleep number.

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welcome back too "squawk on the street." we are anxiously awaiting the december business inventories. it could impact revisions to fourth quarter gdp. the only problem is precipitation. everything's running pretty slow on all these releases. we saw it with claims. we saw it with retail sales. we are indeed seeing it with business inventories. we're looking at many different systems. well, david faber, i could tap dance a little bit, i do like to dance, but it looks as if this number is stalled a bit. we know the reason why. i'll come back and make sure i alert you when we do see this number but i am going to toss it back to you. >> all right, rick, that sounds like a good plan. we'll talk a bit about it, of course, enormous deal and come back to rick as soon as we get

that number, holds his hand up. when i say enormous deal i am talking about comcast and its agreement to buy time warner cable. it is the deal not just of the day, of the year, of perhaps some time in media certainly, a $45 billion all-stock transaction worth 2.87 shares of comcast for each share of time warner. there is no cash involved in the deal. at this point shares of comcast were down or are down a bit. company talking about this being free cash flow accretive, almost immediately. as well citing synergies of $1.5 billion over the first 3 years of the deal. 50% of those operating synergies being captured in year one. and for its part time warner shares as you might expect are up rather sharply, but trading below the implied price for the deal. why? well, it's going to take some time. two companies saying it may be as much until the end of the year that they get approval. others telling me they expect it

will be longer than that. and, of course, a key here is whether they get approval at all. it is not opposition from the department of justice that is expected to perhaps pose a significant obstacle, but more on the side of the fcc. there were political considerations. power and control and diversity of voices become important considerations in its granting of approval for a transaction of this type. earlier today on cnbc i asked brian roberts why he's confident that he will receive approval for this transaction. >> all of our competitors are national, directv, dish network, and cable is this older system that is very local. so, in the new world with business services, a market that's growing and we're the new entrant, we're able to go and over cross regional fiber connections to businesses in markets where we didn't operate like new york if we were coming

from north jersey and you had operations in both markets so there's a lot of benefits. >> of course, for time warner shareholders the benefits are that the stock is up. and, in fact, this does seemingly end the pursuit of time warner by charter and its 27% shareholder liberty media. it was that pursuit that began last let's call it late spring and we first told you about in june that has continued throughout although they had been rejected throughout. and just this week charter and liberty, charter, proposing 13 nominees for the potential proxy fight over the board of directors at time warner cable. with this deal, of course, all of that becomes moot. the expectation is that charter will not come back to try to compete with this offer from comcast. i asked rob marcus chairman and ceo of time warner cable why he has chosen to take this deal from comcast. >> the value being offered was very close to $160 a share and we think the long-term value creation opportunity is even

greater than that for us this was a clear decision. >> and they had been saying for quite some time as we've reported that it was $160 that they felt was the price if charter could figure out a way to pay it and collar its stock, they would have taken that. instead things very quickly turned toward comcast recently, though, they've been having discussions for quite some time as i reported. time warner cable had made no secret of its desire to be acquired by comcast in effect from what i have heard for some time. it was comcast that had reluctance to consider a whole-company deal. i'm told, though, that michael angelockus the ceo of comcast was in favor of it and eventually brian roberts the one who makes the decision comes around to the idea do you know what this is a risk worth taking and once there very quickly they got to a deal. >> but the time warner cable share holders now fully plugged into comcast. they own a portion of the company. it's very much about where they'll take it. >> they will.

>> spun back into a media conglomerate. >> that's true. 25% to 30% of the ownership stake will be controlled by former time warner cable shareholders if the deal goes through. >> that's a big if, right? it will be a fierce debate. >> it's a big if. they are confident on the comcast and twaws comca comcast the time warner front that it will pass muster. there's no break-up fee if the deal should fall by the wayside, comcast will not be obligated to pay anything to time warner cable or vice versa. they might say it's a sign of confidence on the part of both. in fact, they know that this deal should pass muster. >> and nobody would come in with a bigger bid. >> highly unlikely. >> they would say we've only got a third of subscribers, but they have 16 of the top 20 markets. they will control the pipes until kingdom come. >> 84 million houses, 33 million subscribers although they say there's a willingness to divest

3 million subscribers there are no ownership caps and no overlap. >> david, thank you very much. let's go back to rick in chicago. i hear you've got the business inventories figure. >> december business inventories rise more than expected. they were up half of 1% so they were up 0.5. the reason that's notable unlike other inventory metrics that are going to subtract from further revisions of gdp this adds a smidgen. back to you. >> thank you very much for that, rick, unlike retail sales which we'll come to in a moment. let's check the markets. we're off the lows. we were down triple digits earlier in the session and now only down 45 on the dow. we've got the jobless claims and obviously the retail sales figure disappointed. let's bring in steve liesman, the senior economics reporter. a lot of people were wondering how we would hit the consensus given that we lost three to four days of shopping due to the bad

weather. quite clearly. >> i think that's a big story, simon, what i'm hearing is a pretty big debate. i don't think anybody disagrees that weather has played an effect in this data. but the big debate is over how much. let me show you some of the categories where you had the negatives. retail sales obviously much worse than expected. looking for a minus 0.01 and it came in minus 0.04%. autos were supposed to be up a little bit. autos were down. you don't go shopping for cars and furniture also the home business may have been affected by the weather, department stores also and then there's the puzzling building and garden materials. was that snow shovels and snowblowers and salt? we don't know. we tried to correlate. i worked with dan greenhouse on this whether or not when you have big snow or weather months you also have a big pop in this category. we couldn't find it just yet. really what the problem was some of not -- forget december/january, there were revisions to october/november as well and downward revisions so

the consumer looking a bit weaker at the end of all this stuff. and bank of tokyo saying january's weather had a chilling effect on consumers as they elected to stay home instead of battling the elements. barclays says weak u.s. retail sales but not just weather and dan greenhouse at ptig, quote, take into consideration business to the prior months, this report is even worse than it otherwise appears. and quickly as simon mentioned, here's the claims numbers. pretty steady. not a big deal. a lot of volatility october, november, december, but back in the 330 range which is pretty well commensurate, you can do 150 to 200,000 jobs with claims at this level. back to you. >> we watch for revisions to gdp, first quarter, fourth quarter. >> that's a big story, some people marking down already by 0.4 we're going to agree great all this and bring it to you later in the da i to see where the tracking is among the guys who are tracking every single data point. >> steve liesman, thanks. and speaking of the weather, we should note that hundreds of thousands of southerners are

still without power today after a storm barreled through the region. that storm now making its way up the east coast. we're feeling it here in new york. the weather channel's reynolds wolf is in leesburg, virginia, with the latest there. reynolds, the deep south really getting hit. >> reporter: you're right about that, you crazy kids. it's rough stuff in parts of augusta and especially back to south carolina, north carolina. it's not just the story with snow, but it is ice. crippling much of the region. however, when you get here to the old dominion talking about the commonwealth of virginia, it is very different. not much in terms of ice but snow and a lot of it. let me tell you, in less than 24 hours, we saw our streets go from really dry conditions to about 10 inches of snowfall. much of it fell in about a span of about five hours or so. we're going to have a break in the action. obviously no prescription now, but round two comes later on tonight where we could see an addtional 2 maybe as much as 4 inches of snowfall. the snow, the type we're getting actually easier for people to drive through. come on, man.

long skinny pedal, there you go, buddy. a lot of the snow we're getting is actually the weird powder. it's beautiful, beautiful stuff. almost like sand. very, very dry and we should see more of that later on. roads in good shape for now. and the reason why is because governor terry mcauliffe of virginia had over 12,000 piece of equipment out on the roadways trying to keep it clear but people still urged to stay off the roads. same deal in maryland. in terms of air travel, good luck trying to get out of reagan national because they do have closed conditions there. limited conditions for you at the other airports in the region dwi and dulles. many flights for tomorrow already canceled, city buses in d.c. not going anywhere. there is limited traffic, but i'll tell you probably drop a bit. >> excellent. we'll go around again. reynolds thank you very much for that. reynolds wolf joijing us from

leesburg. let's get a market flash, dom chu is back at hq. >> here's a big sliver of green, orbitz, online travel agency reported better-than-expected quarterly profits boosted by vacations and sales packages and beating wall street forecasts. that stock is up 22% today. and a programming note, orbitz ceo barney harford will be live on "closing bell" beginning at 3:00 p.m. eastern on cnbc. simon, stay tuned for that one. back over to you. >> certainly will. thank you very much. up next we have a big guest on a big day the president and ceo of cbs will give us his reaction to comcast/time warner cable deal when "squawk on the street" comes right back. ♪ 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.

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it is a deal to combine the nation's two largest cable companies, nbc universal parent company comcast agreeing to acquire time warner cable for $45 billion in an all-stock transaction. but what is the impact going to be on those that create the content? leslie moonves is the ceo of cbs corporation which, by the way, reported very strong quarterly results last night. significant increase in the company's buyback and the stock is up today. leslie, great to have you, as always, and particularly on a morning where we have some other news that i want to hear from you on. >> well, david, i came on initially basically just to talk about our earnings yesterday, which we were very proud of and obviously we just concluded a year that we had record-breaking

results in everything and in the middle of the night this deal took place and it's what everybody's talking about today so -- >> it is. and that's kind of where i'd like to start with you, not that we won't get, of course, to those earnings and a lot of other issues we like to discuss when you join us. but give me your take, of course, as a company that creates enormous amounts of content that has extensive retransmission fees that contribute greatly to your bottom line, what do you think about the market power of comcast and time warner cable together? >> first of all, i think everybody was pretty surprised by what happened and as usual brian and neil did this deal under cover, under wraps. have been thought they were in sochi, and here they were making a huge deal while that was happening. so, i must say we were all surprised because we heard all the noise about charter trying to elect their own board, and as they did with nbc universal, i think comcast came along and

made a pretty terrific deal for themselves. obviously as a content provider, you know, the good news about comcast is they own a network that competes with us and they own a number of cable channels, so they are a company that believes in content and they believe in paying fairly for content. as you may have heard, we had a little dispute with time warner cable this past summer over what they felt they didn't want to pay what we felt was a fair share for our content. comcast obviously thinks about it in an entirely different way. so, look, the deal is brand-new. we just -- as we said we just heard about it late last night, so we're still looking at the ramifications but we have a wonderful relationship with all the terrific people at comcast and, you know, if this -- if this goes through, we look forward to working with them. >> well, when you say they think about it in a different way, i'm curious as to what you means. by all accounts, of course, leslie, cbs won the battle with

time warner cable, you clearly, it would seem had the power there. will you still have that power to dictate terms perhaps if comcast is a far larger company with 30 million subscribers? >> look, at the end of the day, if you have the right content, you're always going to have the power. and hopefully, as you remember with time warner cable, it's the first time we've ever gone dark with anybody. it's not a question of power. it's a question of value. and as i said, i think time -- i think comcast appreciates the value of our content and will pay appropriately for it. the power struggle that we may have had with time warner cable it was about what we felt was an unfair offer for our content. we don't think it's going to be the same sort of struggle. we obviously already have an existing deal with comcast. >> of course. >> and we look forward to continuing that in the future. >> so, i'm not hearing you at this point saying that you will oppose the deal even though i would think that you might benefit even if you did. >> look, as i said, david, it's really too early for me to

content -- to comment on all the ramifications of the deal. it's very early. we're looking at it. we're obviously talking about it a great deal, but it's way too early to decide what we like about it or what we don't like about it. >> all right. well, let's talk about some things i think you do like which were -- and investors like which were earnings from last evening. revenues for the fourth quarter were up 6%. cash flow, i mean, by every more or less metric that you were measured, you were up and up nicely, including buying back a lot of stock. leslie, you and i have talked in the past, of course, about the power of your content and all of these distribution deals. i've seen them pile up over the last few weeks whether it's blue bloods or whether it's a hulu deal for your library. can you continue that kind of pace of monetizing your content? >> absolutely. i mean, the great news for us is we continue to produce first-rate content, premium content. and there are always seem to be more and more people who want them, more and more buyers.

as you mentioned, we've recently sold "blue bloods" we recently sold "elementary" and we made deals with hulu plus on a major basis. so, there's another svod player besides netflix and amazon prime, so the great news is -- and, you know, wgn is a new player in the marketplace as well. so, the great news for those of us who produce great content, there are more and more buyers who are willing to do more and more to get our content. and as a result, you're right, we have announced over the last few weeks five or six different deals for a library, for current shows, and as far as we're concerned, the sky's the limit and that will continue into the future. >> yeah. something else, of course, that has been typical of the company now is your significant repurchase of shares. >> yes. >> and analysts who follow you given the announcement last night expect over the next two years you'll buy back more than a quarter of the company. why is that the right strategy as opposed to perhaps using that

cash for other growth initiatives? >> the good news, david, we are using cash that we are earning. we are not borrowing money to buy back our shares. so, as a result of our outdoor deal which is imminent, becoming an ipo, we'll have an excess of cash and it's cash that we're earning. as you said, our results are pretty significant so we have a lot of free cash. and we feel returning value to our shareholders is very, very important. there's nothing we're dying to invest in. but at the end of the day when you have the kind of balance sheet we have, using the money for a major share repurchase is very significant, so yesterday we were able to announce a $2 billion buyback in the first quarter which should give our investors great confidence. >> that doesn't mean, though, that you preclude the idea of consolidation. is it possible we'll see cbs -- it's been a while since you've done a big move, but is it

possible you will try to participate in coming consolidation should it be there? >> there's nothing out there that we desire to have. every one of our businesses is working terrifically. we couldn't be more happy. once we spin out the outdoor division in the next few months we're going to be almost 50% advertising, 50% nonadvertising. we love the balance. we love our assets, so there's nothing out there that i'm saying to you if this deal is possible we'd love to make it, so we're feeling pretty good. >> one thing that's still out there is, of course, the supreme court going to rule on this aerial case. we haven't spoken since that was the case. what are you going to do if they, in fact, rule in favor of aerial? >> look, we expect that the supreme court will do the right thing and side with the people who are providing the content. not the people who are taking our content and using it illegally which is our point of view. however, if that should happen, if the worst should happen, there are so many other

alternatives that will not -- so this would not affect our bottom line. obviously the networks collectively could do their own version of aerio, there's a way to put our signal on cable without putting it over the air. there's also over the top for us. so, there are many, many alternatives to allow people to receive our signal no matter what happens. so, it's something that obviously the supreme court will decide but it's not anything that we're deeply concerned about because we have alternatives. >> all right. and finally, leslie, back to our first subject, you have affiliated agreements with time warner cable and comcast. i don't know if you pay one more or less. do you pay less to comcast and should investors be concerned that, therefore, that will become the lower bar over time? >> i don't think investors should be concerned. obviously there's going to be conversations between us and comcast and the ongoing years. we just went through a very hard-fought battle with time warner cable to get our rates up high and we're very pleased with that deal.

and once again, very early and there's a lot of discussion to be had. >> all right. still making money from "i love lucy." i just love that. >> still making money. >> leslie, as always, appreciate your time. thanks for joining us. >> thank you. >> leslie moonves, cbs ceo, sara? >> i love "i love lucy." up next carl is live in sochi with the latest on the olympic games medals count and what you should be watching today. we're back after a quick break. we don't back down. we only know one direction: up so we're up early. up late. thinking up game-changing ideas, like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here... and pay no taxes for 10 years. with new jobs, new opportunities and a new tax free plan. there's only one way for your business to go. up. find out if your business can qualify at start-upny.com

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one-third of europe's billionaires call russia home, so we want to find out who are they and what do they own. carl quintanilla joins us live from sochi with more on that question plus the latest from the games. i hope you are enjoying the weather at the winter olympics while we are getting pummeled

with a snowstorm in new york. >> reporter: i know, 65 degrees, again, today, sara, and the same way tomorrow, we've been saying welcome to the sochi summer olympics. you mentioned the russians and what's turning into a story is how well they are doing in specific events. talk about figure skates, and look at the free program, the russian pair won their second gold medals of these games and this is the first pair to win on home ice since 1936 and you got to check out the reaction as they finish the event. utter joy. they pretty much knew they had it locked up. it was a great moment from last night in the figure skating competition, but it does bring russia to mind and you talk about billionaires here. a decade ago there were eight billionaires in the country today there are 110, they're an economic force to be reckoned with both here in russia and around the world. so, just how rich are russia's superrich?

take this one, net worth $14.8 billion. he just so happens to be top dog at luke oil, the second largest oil company in the country. he's the biggest shareholder. next up, his war chest comes in at a hefty 15$15.1 billion mostf which is cammed out ped out in bahamas. and here's the third richest person in mother russia with a mother lode of $15.4 billion. he drops his cash on art. then there's the king of $16.5 billion making him the second wealthiest person in russia. this alpha billionaire founded the alpha group, one of the largest privately held investment groups in russia. and russia's richest title goes to this man, with his $17.6 billion fortune, he also holds a 30% stake in england's arsenal

soccer club. by the way, he recently moved his money to a british virgin islands-based holding company. that's about 6,000 miles from moscow. those are some big numbers. i tell you russia would like to see bigger numbers on this screen right here. they have nine medals. that's behind the netherlands, canada, the u.s. and norway. despite how well they've been doing in figure skating, guys. so, a lot of action coming up tonight. of course, curling this afternoon on cnbc. and coming up in the next hour we'll walk you through all the souvenirs that are for sale here in olympic park. >> looking forward to it, karl. i don't know if you know this about me but i used to figure skate when i was young and i am obsessed with the 15-year-old russian figure skater. i want to know when she's back on the ice. >> reporter: yes, she's gone back to moscow for more training and practice before she comes back i think next week, so i'm aware of your obsession with that athlete and it's great to hear that you actually skated yourself. >> well, actually, since you

demonstrated your prowess on the slopes yesterday, carl, maybe sara would like to take to a rink somewhere in new york and we can see it. >> oit's been a few years. >> it seems only fair. we'll come back to you, carl, later. we're late from natural gas inventories. let's get over to nymex. >> the number just coming out from the department of energy and we saw a drawdown in natural gas supplies for the week ended february 7th of 237 billion cubic feet, that is more than traders were expecting. they were looking for a drawdown of 230. let me put it in context for you last year at this time we saw a drawdown of 157 billion cubic feet. you can see this number is substantially higher that is because of the cold temperatures that are outside. now, this morning we were up about 3% just before this number came out. now hovering around that $5 resistance level. traders are saying with this bullish number they actually expected us to break $5, they want to see 508 or 510 to know

the bulls are back in this trade. it's a technically driven trade supported by the cold temperatures outside and traders are also saying they are expecting these prices to say relatively high even into the springtime because the storage and drawdowns have been so severe, so we're going to be watching these prices very closely. but nat gas trading just above $5. guys, back to you. >> thank you very much, jackie. we are really stacking in the interesting interviews today. straight ahead on the show, the online real estate site zillow added fewer paid customers, but the outlook is light. they are ramping up their tv spending, the ceo spencer rascoff will join us live on his take on what works now.

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so, how is the severe winter weather impacting business and economics across the country? we've been digging into this question all morning long, frozenonomics and walmart said 137 stores are closed across walmart in alabama, georgia, north carolina, south carolina and virginia. quote, from the walmart spokesperson the biggest challenge right now is staffing.

and we've been seeing this across the board when you look at some of the other companies, you know, retail sales, simon, gave us a pretty good clue about the weather impact on the broader economy. negative number there on retail sales, negative 0.4 revisions and i was talking to an economist at renaissance macro, he says it's impossible to know how much is the weather here, but he suspects we'll be looking back in may at all of this as just noise. potentially americans not spending because of the weather. we saw it broadly across categories in retail sales. and if you look at some of the other businesses here that i was talking to, lowe's, for instance, obviously they're trying to stock their shelves with more equipment to help people handle the snow. they were talking about the salt shortage saying that they were trying to provide more. we're working with our suppliers to quickly replenish shelves with many different type of emergency products to help during preparation and recovery and they also point out while ice melt is in short supply due

to heavy demand, there are several alternatives consumers can consider such as water softener salt, shovels and snow throwers. one other comment from macy's, 25 stores closed yesterday in the southern part of the united states between macy's and bloomingdale's. we'll talk to the business and find out color and numbers on how they're being impacted but clearly it's the story of the moment. >> and cat litter. >> and cat litter. you can use that? >> you can use that under the tires of your car. i saw it on a farmers advert. >> news you can use with simon hobbs. >> zillow are under some pressure today, the fourth quarter earnings came through ostensibly a beating i believe on the top line. here in a cnbc exclusive is spencer rascoff the ceo of the real estate site zillow. spencer, good morning. >> good morning, simon. >> what is the underlying state of the business? the big news here is you'll ramp up your tv spending $65 million in the year to come. i imagine that's partly why the stock is under pressure today.

>> yeah, i mean, last night we announced a stellar quarter which ended what can only be described as a breakaway year. we crushed on revenue and ebita and every metric and traffic is up 70 odd percent year over year, but what we also announced was a big investment in 2014. in 2013 we spent $40 million in advertising and in 2014 we'll spend $65 million on advertising and as a result we'll take a bit of a near-term hit for profitability. we'll keep margins flat-ish year over year but we think it's the right decision to grow audience. we're a media company and like cnbc todayers follow audience and we're now twice the size of the number two or number three competitors in terms of audience and we think in 2014 we can get a lot bigger and we'll reap the benefit of that down the road. >> i think you referenced on the earnings call last night where you could get the advert zillowcom/tv. we can see what you've created. what's interesting to me despite

the fact that you are an online operation appealing, therefore, to a younger demographic it's old style tv where you're placing the ads. i imagine those are the guys that actually are kind of transaction ready if you like. they've got a house to sell. >> well, tv advertising still works. and, you know, you can actually be thrilled to hear that even though we're a digital company and we make money by selling digital advertising, one of the great ways to grow the zillow brand is spending money on advertising on tv. it worked incredibly well for us in 2013, we grew our unique visitors 30% and our lead to real estate agents 70% on the backs of advertising and product development. and that was a big bet in 2013. we're going to make an even bigger bet in 2014 and fortune favors the bold. >> hey, spencer, i think your figures are very good for january you were saying. you've got a real -- >> yes. >>-- boost on the number of people, on the google analytics which i don't think is an industry standard, but still,

they're looking very strong in january. conversely, diana olick who is our housing reporter wants to know whether weather is the reason for the slowdown in the housing market more broadly. can you comment on both? >> our traffic spiked in january. 70 million unique users up 52% year over year. it's very hard to know how much of that might have been driven by weather or something else. i mean, for us mobile is now two-thirds of our usage and i think a lot of people got shiny new smartphones or tablets over the holidays and in january they download their top apps in every major category and in real estate they download the zillow app. i think it benefitted in january from the mobile migration. it's very hard to say whether weather impacted us favorably or not. >> i'm curious about the weather impact on the housing market in general. you have terrible weather, mortgage rates set to rise in 2014. is there really enough job creation and income growth to balance that out and keep the housing market recovering in the new year? >> in 2013 home values appreciated 6%. in 2014 we forecast 5%

appreciation which is still above the norm. the norm is kind of 2% to 3%. but the housing market is cooling and there are a couple of reasons why. firstly, as home values have increased homeowners have been freed from negative equity and more people can list their home now. secondly, there's fewer investors purchasing going on. and mortgage rates have ticked up so homes are less affordable, so there's more supply, less demand, that means a slowing housing market. but i think it's too early to worry about january weather, the peak shopping season isn't until spring and early summer so i don't think bad weather in january will have a big impact on housing in 2014. >> before we let you go, the most exciting thing i see from what you are doing at the moment is street easy which, of course, you bought for $50 million in the summer of last year and this basically gives people information particularly new york about the apartments around them, what they are selling for, how they were discounted. i see that overnight you've now said that you're going to basically give that information away for free. that to me makes it look like

you're becoming almost what trip adviser was within the travel industry, you've got the value adds, you get people watching and then you take them down a commercial route, is that correct? >> well, let's just say i'm on the trip adviser board of directors so that's a story that i know very well. and here's hoping that we can be as successful as the path that trip adviser has forged in their category. street easy is by far the largest real estate site in new york but it's always behind a pay wall and we made it free last night and completely redesigned the website, making it free i think is a great first step to growing its audience and that's the focus for us now with street easy in new york. >> cool. >> love street easy. it's free. i can get, like, the previous things i used to have to pay for to see what people paid for stuff, i get that free now? >> it's free now. i love it, too, i love it so much we bought it. >> way to go, spencer. >> nice to see you, spencer. thanks for joining us. >> thank you. >> the ceo of zillow. >> do you walk around looking at people's window at night? >> no, i don't.

in fact, i'm out of the real estate market but you still -- >> new yorkers can spy others' houses. up ahead read hundt gives his reaction to the time warner/comcast cable deal. make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today.

welcome back to "squawk on the street" and thursday's edition of the santelli exchange. it hasn't been a big data week but today we changed all that and i'll work backwards somewhat. we had the last read on inventories for 2013. it a december number. the bis inventories were up half of one percent so we can put a tombstone on inventories. but what's the real issue with inventories? the issue is when you build widgets, that figures into gdp, but the real question is, the drawdown of that inventory. how aggressively doeset get consumed?

so, if you kind of look at 2013 in its entirety and break it up midyear, the inventory build at the end of the year was close to 2 1/2 to 3 times as large as the inventory build in the first half of the year. why is this important? because, first of all, we are seeing all the revisions that i look at for the next addition of our second look at fourth quarter gdp most likely to be under 3%. if you recall it was originally 3.2, but maybe more important is the fact that many shops are also downgrading q-1. and it isn't from four to three, you know, we were all thinking we were going to get the lofty numbers. we're looking at goldman, for example, at 1.9%. and i know steve liesman's going to be putting together all of these changes and downgrades to first quarter gdp, so we're going to be anxiously awaiting to see that hit from steve.

now, let's switch gears a bit. we also saw retail sales today, and i understand that the headline number, and we'll switch colors here, was down 0.4. but that isn't the number that everybody's looking at. they are looking at exautos. that was a goose egg, if you look at exautos and gas you were down 0.t2 and no matter how you slice it, it's no good. if you look at the u.s. economy that looks like a heartbeat, that's the big problem, and that's why the word continuity used by janet yellen affects different investors in different way. the sustainability is the issues and many of the manners and procedures and programs and strategies to jump-start the economy work. but they don't jump-start it to the point that it's self-sustaining. one final point. we talked in the last couple of days how the retracements of 38% were 255 -- 275, for tens, i apologize, and 155 for 5-years.

we barely closed above the yields yesterday, we're below them today. it's more art than science, be very cautious in the selloff in treasuries over the last several sessions. sara, it's back to you. so you were a figure state kate that's very cool. >> i was for a few years in my childhood. simon has challenged me to go back on the ice. >> 30 rock. >> we have to get a crew out there. >> i think i need a brand hinew sparkly outfit. >> wardrobe said they have a new outfit for you. see you out on the rink. >> thanks a lot, rick santelli, over in chicago. coming up, terrible weather plaguing areas all over the country this winter, but the very bad weather could actually mean very good things for certain companies. find out which ones and how you can profit. we'll be right back. >> and great for skating. game-changing ideas,g up like this: dozens of tax free zones across new york state. move here. expand here. or start a new business here...

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marketing had been down triple digits after disappointing retail sales and jobless claims. we are well off the lows right now. just eking out green arrows for the s&p and the nasdaq. let's bring in david kelly chief global strategist with jpmorgan funds. chief economist with regal. what's driving the markets right

now, because johnny was supposed to testify. she's not. things were calm there. i guess that $45 billion cable deal isn't doing enough to lift spirit, either. >> no, i think people are genuinely worried about the retail sales weakness and numbers that have been weak. but offset that is the fact that when -- et cetera kind of like a flying in the storm here. we're working off instruments because the visibility is so bad. these weather effects make it difficult to interpret the data. when we look at models of how various sectors of the economy work they are telling us when we get passed the bad weather we should see a pick-up in demand. overall, moderate economic growth. if you believe we're going to return to economic growth, push down turn employment rate, you still want to be short fixed income and long equities. one thing about the here and now but the model is saying something else about the how the year will turn out. >> jeff, do you agree you can

write this off to the weather and you don't have to adjust your position in the stock market and bond market? >> i wish i could tell you it was all weather. but we fear it's a little bit more than just weather. i would point you to the downward revisions to november and december, which is going to take a slice out of fourth quarter gdp. i think we're in a 2% to 2 1/2% growth economy and not a 3%, 3 1/2% growth economy. that really matters. if we were in the camp of the 3 1/2% growth economy then we would be talking about much more upside risk to treasury yields. but since we're in the data seems to confirm this, more in that 2% to 2 1/2%, interest rates can state where they are or even push lower based on the data coming? >> david, i'm sorry, my problem with that piece is if we were in a 2% to 2 1/2% economy last year and the unemployment rate fell

by 1.2 percentage points and the second part of our argue of this is moderate growth will push that unemployment, push up wages which is going to force the fed to at least stay -- david,david, david, david, surely the unemployment rate didn't really fall because of job creation and, therefore, wage growth. unemployment fell for other reasons, didn't it? participation rate. that's the big -- >> yes. >> come on. >> that is structural and demographic and it's going to continue. even moderate economic growth is going to push turn employment rate down in this market. >> what about that proposition you made which is to be short fixed income and long equities. don't we have to acknowledge as janet yellen did that we have a problem with inflation undershooting and we have a problem with unemployment growth at the moment, say the figures, retail sales, isn't that likely to benefit longer dated fixed income to possibly a greater extent? couldn't that be a big trade in the first quarter? >> it has worked the first two months of this year.

but when you start at 275 it's -- you're getting a lousy coupon and when you think about -- the fed is still buying a lot of bonds. it's going to phase that out. it's going to eventually have to push the federal funds rate up. and as if the unemployment keeps oncoming down that's what i think will happen. short term is work. i think long term -- it's only small underweight but i would have a small underweight to fixed income. inevitably interest rates will get pushed up so long as this economy continues to growth even at a moderate pace. >> maybe traders are listening. positive on the dow, s&p, and nasdaq. just ticking a little bit higher as we speak the david and jeff, good to see you both. thanks. >> thank you. >> thank you. up next on the program, why starwood hotels is not so hot today. we'll be back.

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i just want to mention starwood here, one of the main losers on the session. the conference call starts in half an hour. in advance, some concern they're guiding below the sent census of $3 for the full earnings purr share. in addition to that various analysts commenting, ubs says the china and asia is looking

increasingly uncertain for the year ahead. interesting comment, said share repurchases once again underwomening given the strength of starwood's balance sheet. that may enforce the view that starwood is keeping the powder dry for a larger acquisition. let's get to it. here's what you might have missed if you're just tuning in. >> welcome to "squawk on the street." here's what's happened so far. >> our top story today. comcast is set to buy time warner cable. >> why do this deal? >> to find a deal with this kind of synergy that can be accretive in the first year and to get about half those synergies expected in three years within the first year. majority of them. that's very unusual. >> what does this mean for directv, for dish? i think if you're directv you look at what now may be a national competitive in comcast, and you say, okay, could we get

a dish deal? at least you've got to start -- investors have to start to think about that today, whether or not -- i don't believe there's any conversations about that. but these are the kinds of deals that spark thoughts. >> where are we in the balance? you have to keep prices low in order to keep these competitors out. >> we're not just about price and xheeting. we're also about quality, highest quality standards. it's balance between value and quality. and i think we make our way forward based on both of those, not just on price. >> there it is, the opening bell. >> our results are pretty significant so we have a lot of free cash. and we deal returning value to our shareholders very, very important. there's nothing that we're dying to invest in or buy another company. obviously we're investing in our content but at the end of the day when you have the kind of balance sheet that we have, use ourg money for a major share repurchase is very significant.

>> good morning. we are live here at post 9 at the new york stock exchange. let's get a check on markets which have turned around and are now marching higher. dow, s&p, nasdaq all as you can see in positive territory creeping a little bit higher after disappointing retail sales. a surprise negative number there for the month of january. we're watching shares of pepsico slip afping after fourth quarte revenue. annual dividend to $2.62 per share. we start with a mega deal that's very close to home this morning. our parent company comcast agreeing to buy time warner cable in a deal that's worth $45 billion. our very own good friend and colleague david faber spoke with comcast ceo brian roberts and time warner cable ceo rob marcus this morning. over to you, david. >> thanks. this has been some time in coming in a way. of course, it was last june we

first told you about conversations between charter, 27% owner liberty, and time warner cable in which charter was trying to convince time warner cable to the benefits of consolidation. in the months that followed it, failed to get time warner cable to the table and during that time time warner cable came to comcast a number of times and said, come on, guy, just pay the number we want and buy us. it's going to be good for you. it's going to be good for us. finally, brian roberts decided to do just that, in fact. despite what may very well be a tough regulatory review not just from the department of justice but from the federal communications commission. as for the financial thoughts behind the deal, i did search warrant 60 roberts earlier today on "squawk box" why it's a good deal from that perspective. >> when you take out the bill and a half synergies we're paying 6.6 times cash flow to buy some premier markets and a premier company. and that's because of the

synergies. and when you look at that, that may be the most attractive acquisition we've done in many years. >> sounds to me -- they're doing it and saying it's going to be free cash flow accretive very, very quickly. of course, all with stock. they are not bor lowing anything. they will keep leverage low and institute a $10 billion buyback upon the close in the transacti transaction. it is that close that's still in some question, the company is hoping to complete the deal by the end of the year. maybe longer than that. it may be quite a battle at the fcc. here's what rob marcus, the ceo of time warner cable had to say about why he believes it will pass muster with regulatory authorities. >> naturally when you evaluate a transaction you take into account both the transaction itself and probability that it will, in fact, be completed. in our estimation here is that this transaction will, in fact, clear regulatory hurdles and be completed. >> make the point, of course, that there is no overlap. in fact, between any of the time warner cable properties that include new york no, and los angeles amongst others.

and comcast properties and that they will, in fact, even enforce net neutrality even though that is no longer the law of the land having been overturned by a court. the we'll see. that is a key consideration in my reporting over last few months. after i first reported comcast interest in time warner cable. many had said that brian roberts was still reluctant to enter into a another consent decree with the fcc along the likes that comcast did when it acquired control of nbc universal. we shall see. and for more on this actually let's get insight from somebody who would have a good perspective. reed hunt is a former fcc chairman. he joins us on the news line in a first on cnbc interview. reed, nice to have your thoughts and perspective here. i know it's been a while since you were in that chair. but none the less, take me through what the fcc is going to look at as it considers whether it approved this deal. >> well, i think the fcc and department of justice are both

going to take a hard look at this year bigness of the deal. nobody but comcast could have done anything as big as this. if the deal is approved it could be like building a pyramid in the media landscape and broadband landscape and it will, affect, like the pyramid, it will be there for years and years to come long after regulators and presidents have gone. >> brian roberts says, listen, all of our competitors are national, directv, dish, cable is this older system that's very local. so in the new world with business services, and a market that's growing, we're going to be able to actually increase competition. do you buy that? >> well, i think the numbers will tell the tale as far as i can tell the combined companies would have about 50% of all cable video subscribers and they might even have the bigger percentage of market share in freud band. so the department of justice and the fcc will both, i think, look

at the impact of that kind of broadband consolidation and that kind of cable video con so dagsz. you will look at it upstream on content companies, tv channels, netflix of all kinds of content companies. they loo look at the impact of equipment on companies that want to connect to this pike and they will, of course, look at the effect on consumers as broadband subscribers and consumers as paid video subscribers. so this deal is -- i don't know if they're too big to veil to get approval but definitely too big to sail through the agencies without serious, serious scrutiny. >> reed, are all customers equal in this regard, the important thing that you're bolting together, key markets, new york city, l.a., dallas, in addition to what you already have in kentucky and new jersey. obviously that gives them

greater power in the main watching areas but at the same time it also gives them the ability to lead in innovation in technology to reinvigorate an industry that you otherwise might argue is in decline. does that matter? >> well, broadband industry is definitely t not in decline. broadband is a burgeoning market. people need to be investing in the broadband pipe and these two companies would have such a large market share in broadband that would question the regulators would ask of them is, do you want to own a bottleneck or are you willing to open it up and keep investing and give us more and more bandwidth for less and less money. that's the question they're going to be asked by the fcc for sure because tom wheeler is committed to making sure the open is -- the internet is open and he doesn't mean a thin little pipe or a tiny little straw. he means a big, big huge roadway to the broadband future. >> right. now, of course, you ran the fcc,

mr. hundt at the advent of the internet. frankly, it's very difficult to predict the technological changes that are going to completely destabilize industries such as cable. i mean, how much, if in any way, can the fcc sort of try and understand what the landscape will look like years from now and whether something that might seem anti-competitive really will be? >> i think they will be the best they can to form a good view. there is a tremendous consensus in the whole tech industry and in the media industry about the fundamental road maps of broadband both on the wireless side and on the wire line side. i don't think people misperceive the future 10 or 15 years out. beyond that, who knows. i don't think people misperceive the future. i think the bigness of this deal will draw serious scrutiny based on widely held assumptions about the trends in the market. >> okay. i'm going to put you on the spot.

is it going to get approved or not by the fcy? >> the fcc and the department of justice, i think, probably have not green lighted the deal already. i don't know what the companies have said to them but i would be very dubious if that the deal has already been green lighted. i think it's too early to say that it will be approved without serious, serious scrutiny. and who knows if the conditions the government asks for will be bearable by the companies. who knows. >> they've already agreed that they would divest 3 million subs. there are no caps any longer in terms of ownership. >> yeah, but that's -- 3 million subs on a deal that combines, i think, 33 million, that's not that much of a divestiture. and that doesn't speak to the broadband market concentration. >> could they do a deal and say, look, we'll offer this price for "x" number of years on broadband to accelerate the its use in the fast capacity in the company?

could that be something that could be on the table? >> wow would think that would be a topic. for sure you would believe that chairman wheeler at the fcc is going to want to figure out what ought to be the right open internet order. his fcc's order, his predecessor's order was thrown out by the d.c. circuit and here you have a combination that involves the two biggest broadband companies in the country. so absolutely for sure the fcc is going to say, well, what kind of really long-term and important conditions to guarantee an open internet are possible here. that's just one example. >> mr. hundt, we've got to leave it there. appreciate your time. >> thank. >> bye-bye. here to the other top story of the hour, that would be the weather. massive winter storm pounding the east coast bringing snow and ice from maine all of the way down to georgia. the weather channel's kait

parker is live for us in phoenixville, pennsylvania, which is 30 miles northwest of felly. kait? >> hey, yeah, guys. we chose this location because this area was hit incredibly hard last week with an ice storm. that's what brought down this big puppy you see here behind me. this is massive. this tree came down. fortunately in the front yard and not on the house, a couple doors down, they weren't quite so lucky. knocked out power for five days. so this snow event is insult to injury. but here's the deal. this is record breaking in philadelphia. we are looking at a greater than six-inch snow event once again. already at nine inches because that makes four times the season that we have seen a snow event of thatmagnitude. it brings us into the top five snowiest seasons in history for philadelphia. definitely a record breaking season. in fact, i tried to go to a couple of outdoor sporting goods stores yesterday and everyone was sold out of snow boots, anything having to do with

keeping warm. any snow gear in general was running very slim on the shelves there. so folks have been doing their best to stay warm, especially -- another story, too, completely out of space heaters. a lot of people don't have heat around here. they've lost heat and they don't have the ability to get the utility companies back out here to get the heat turned on. so it is kind of a troublesome situation and it will continue to be so until we get this freezing precipitation and if it's going on right now and we start to clear out hopefully toward next week. back to you guys. >> tough situation, kait, thank you very much. we know the weather is bad and it's especially tough clearly if you're trying to fly today. we're going to go live to o'hare airport in chicago to give you an update on what is happening or not happening in the skies. and also rick santelli with another santelli exchange. ricks rickster? >> yes, simon, we're going to be joined by ira harris at 10:40 or

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equities are now in the green dollar/yen off the lowest of the session. the worst performer on the s&p 500. dominic chu is back at hq with more on that. >> relative underperformers. transportation companies like rail stocks, kansas city southern, norfolk southern, think those names. for norfolk southern the company did confirm one of the trains carrying crude oil derailed somewhere in western pennsylvania. also on the transportation front you've got cargo and shipping giant fedex down around a percent. masco down a percent. and farm equipment maker deere, a day after reporting earnings and projected a sales slow down this year is also down. it's sect straight day of losses, simon, for deere shares. back over to you. >> thank you, dom. let's move over to the weather. over 5,000 flights have been canceled because of today's storm. and then they get worse as that they goes on. phil lebeau is live at o'hare airport in chicago.

phil, i can't imagine any flights can land or take off on the northeast at the moment. >> it's terrible on the east coast right now, sim upon. in fact, how bad is it today? we are approaching 20% of all flights in the united states being canceled today. these are the latest numbers from flightaware.com and these are staggering compared to the last couple of storms. 5700, more than 5700 cancelations today. delays of more than 3100. delta is the most impacted airline with 30% of its flights canceled. and this storm is hitting the airline hubs on the east coast. that's why we're seeing so many cancelations. but the ripple effect of this storm can be felt across the country. look at these people. they're in san francisco, cancelations on the board. they're sleeping because their flights are not going anywhere. at the faa command center on the east coast they're tracking the storm as it works its way from the southeast to the northeast. keep in mind on average there are 33,000 commercial flights

scheduled every day in the united states which makes these numbers even more incredible. according to to maflights, this year 71,000 flights have been canceled. the average, more than 1600. passengers impacted, 4.9 million. that means we're looking at more than 5% of the flights being canceled every day of this year. and yet, when you look at the airline index, guys, it's up 3.6% year to date. that's because investors are saying, it's bad for all the airlines, we're looking through that and we know that they're going to have a rough q1 but eventually we're going to see the business come back. that's the latest from here at o'hare. guys, back to you. >> similar question. investors are asking about the u.s. economy with the disappointing retail sales. phil lebeau, good to see you at o'hare chicago's airport. up next here, turns out a good morning for the u.s. men's hockey team at the winter olympics, but the games have been chock-full of action at every event. we will go live on the ground to

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it may be a freezing winter wonderland here on the east coast but at the winter olympics in sochi, it's a down right balmy 65 degrees, or it was today. our very own team member carl quintanilla is live from sochi. things are looking good on the sporting front as well for team usa, carl. >> good stuff for u.s. as we caught up almost with norway, simon. but a shocker of an announcement just moments ago, sarah will be interested in this. the superstar russian figure skater just before his routine a few moments ago pulled of the of the short program. if you don't know him, you probably have heard of him in the team competition when he helped russia win the gold. he won the gold himself in '06, a silver in 2010.

a faifd here today but because of continuing pack issues, pulled out and russia will not have anyone in that event tonight. the bi athlon tonight. norway, get this, is looking for his 13th olympic medal. if he gets it he will be the most decorated winter olympian of all time. the u.s. could win their first biathlon medal ever. tim burke is a hopeful for this medal. for every missed shot you take a minute is added to your time. we'll see how the temperatures here affect the athletes. we talking about temperatures, one thing that is not affected by the temperature is the shopping. we love to talk retail on this program. here's a look at retail in olympic park. some of the big seller here's are going to sell 2 million of these sochi mugs, 3 1/2 million magnets, and nearly a million of

these olympic plush polar bears. his name is mishka which means little bear. these are everywhere. these are the russian jackets, russian olympic team. it's ru, which is practically tm the games. there are some big ticket items. the prices will get your attention. $750 for this russian ski jacket, complete with little zippers for your ski pass on the sleeve. and they're selling thousands of these, sochi gloves, $14 apiece with the customizable sleeves you put on over them with a flag of your choice. whether or not they said sales records remains to be seen but you can't argue with the lines. a long cue to get in not long after the storm opened. letting in a dozen people at a time. that's good news for the organizers and, of course, good news for visa. visa, of course, is -- oh one of the official sponsors of the games. you basically cannot buy anything here with any other

card. only visa or cash. girks here are the gloves. i know you want them, sarah. i know simon, you'll probably take them, too. so give me your shopping list now because i'm really only going to be here for one more full day. >> i would love a pair. i don't know about you, simon sglil leave it entirely open to you as i'm going to refer to you. you bring back what you like. i like the ski jacket. >> great. >> you will have to be doing it on your personal one. i'll have the ski jacket. thank you. >> they are very nice, guys. >> they are. >> see you later on. >> i can't believe that about plyushchenko, what an upset. >> that's going to be heartbreak for the russians tonight. we still can't believe it. >> he is beloved. ca carl quintanilla, good to see you. bring back gloves and russian rubles as well. coming up here on the program. already took a good look at the winter storm that is pounding the east coast. things are also pretty bad in the south as well. we'll give you an inside look, also tell you which companies

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the european markets are closing now. >> and on the seventh day of trading european stocks fell into negative territory. and then rebounded as you can see. some green on the screen.

the big difference for what's happening here in the united states and what's happening back in europe is that the earnings appear to be noticeably disappointing. let me show you where we are on the banks today. we've got negative territory. taking more than a billion dollar provision in activities here and. lloyds bank in the uk disappointed today. rolls royce has disappointed. check out how some of the others -- look at this. rolls royce down 13%. this is the big defense contractor and engine maker. the first time in ten years the revenues will be flat this year. tate and lyle, makes sweeteners and sugar, they have a problem with the sugars. reno is a gainer. if you look overall deutsche bank is suggest that about half of the companies that have reported in europe so far, remember, their earning season is half of them, 50% have beaten expectations. that is much worse than the 69%

that you've had here. that's partly of course because europe is exposed to europe and emerging markets. the cheap brand in particular, commerce bank, came out with figures as well. and we're waiting importantly for political developments in italy. will the prime minister of italy pictured here unveiling new plans to take the coalition forward yesterday keep the unseated by the challenger from within his own party, renzy. he just called for the prime minister to step aside, for the coalition to change. interestingly, sarah, if you look at the poll in the newspaper today, only 14% of italians want that to happen before the election. so we'll see where that takes us. actually marks are relatively stable. i just want to show you where we are on the italian yield. i know it's bounced, but come on, get real. look at the figures. it's not huge. >> no signs of panic just yet. >> it's not a word that is on the table at all.

>> yet. not at all. all right. we are watching the italian bond yields and watching u.s. stocks as simon indicated. let's go to mary thompson with a look at the floor. >> hey there. we've seen 120-point swing in the dow jones industrial average today. markets reacted negatively to the disappointing retail sales data. the markets are bouncing back. and cutting their estimates not only for the fourth quarter growth but first quarter grourt as well. in addition to the markets coming back we've seen the dollar strengthen a bit against the yen. broad based climb. we continue to see a little bit of weakness in the banks on concerns about economic growth going forward. what we're seeing is strength in media stocks on the news, of course, parent company of nbc comcast has been -- put a bid in for time warner. buy it there. we're also seeing strengths in semis and you t'l utilities. nasdaq on track for the sixth straight day. better than expected results from the equipment maker,

applied material, and the chip company offering positive guidance. keeping a drag on the dow or putting a drag on the dow is cisco, earnings beat but the company's revenue forecast for this quarter is disappointing. again, the data hit the markets initially, now investors seem to be focused on the earning news. some of which is good. couple of them are bad. take a look at the s&p leaders. goodyear, tire up frongly after the better than expected numbers. cbs had good numbers. time warner on the news that comcast is bidding $44 million for the that company. >> mary, as you mentioned, watching the dollar/yen off the lows. since the weather is nasty a lot of you are probably going to spend more time indoors. that's great news for companies who have a great big online presence. seema is live with that. seema, name some names for us. >> sarah, it's a mix of snow and sleet right now. as you know, times square typically sees some of the highest foot traffic in all of

new york city. but with today's snowstorm there's less people outside, more people inside. that could have a negative impact on some companies. but we found that the online delivery space is thriving. >> bad weather i would say is not only good for our business but the merchants that we serve. >> e-commerce site delivery.com is located in 15 major cities nationwide and enables customers to order online from local businesses, has seen the pickup in sales this winter partly due to a surge in booze. one up 60% year to date. delivery.com is expecting booze sales this weekend to be extra strong given that more people will be celebrating valentine's day at home. now, that could be a boon for spirits and bev ran players like budweiser, beam, and constellation brands. oppenheimer says with more people stuck at home expect online traffic on retail sites like amazon to rise. oppenheimer also says netflix

could be a key beneficiary. during hurricane sandy reports indicate that netflix saw a jump in video streaming. don't forget, "house of cards,"er isries two of the series will premier tomorrow. that may give consumers a reason to log in. back to you, sarah. >> i love "house of cards." i'm excited for that. seema mody, stay warm in times square. >> did we really show the stock chart of spirits companies, that they might jump on the base sis that everybody is trapped inside? >> stay at home, they've got to drink. >> they've got to. >> i guess. >> well, weigh in. >> the olympics are in russia. get some vodka. get in the spirit. >> okay. here to weigh in on the cabin fever winners is from buzzfeed and indeed our own jon for fortt. where are we, jon, on the cabin fever trades? >> most of the storm was january. so it's hard to look at q4.

netflix we have realtime data. reed hastings put a haiku on facebook, screen glows my favorite shows, 2 billion hours. wow. 2 billion hours is what they did in the totality in q4 two years ago. 70 million new byes in january as compared to 50 something new ones. people are consuming more content. i don't know how much more they're buying though. >> here's my problem with that argument on netflix and some of these other companies. there are hundreds of thousands of people without power right now across the southern part of the united states. >> right. >> so they're not getting the benefit there. >> tens of millions of subscribers know. the best idea on twitter by netflix is "house of cards two" is supposed to come in at 8:00 p.m. tomorrow. release it now. release the season ahead of when it's scheduled. >> half the team won't be in. con jon? >> i think you've got to look at

who has got momentum right now. when you don't have people out on the streets, their eyeballs have to go somewhere. you consider facebook and the momentum that they've clearly had. people are going to be looking at facebook more. maybe more transactions. we're talking a lot about online stuff. of course there are off line players like home depot, it's seeing a rally over the past week. that probably has to do with people expecting that folks will go into stores buying shovel, snowblowers, what have you and picking up a few extra things. also got to think about upss and fedexes along with this delivery stuff. >> we don't know how that affects them because over christmas when things get tough that can lift the rates at which they operate. >> i ordered an extension cord for the snowblower and i got it one-day delivery because i knew the storm was coming. >> simon, one travel stock for you. i know it's your favorite sector. orbit is ripping today. it could be storm attributive because airline tickets fell 11% while revenues of hotel and vacation packages are up.

everybody is cold at home, unhappy. let's go on orbitz and book a vacation. stock is up 26%. >> it's interesting because you also saw that with expedia. >> yeah. >> very strong hotel bookings. i think it's actually more structural. i think they would argue that they are getting -- really persuading the hotel that this is not a place where you dump your stock in cries sis. you can work together and raise margins. reverse technologies. >> it's a mixed bag because trip adviser had hotel shopper growth grew 25%, deceleration from the prior quarter. with those online travel stocks it hard to sesz out a clear line. >> online travel, online entertainme entertainment. >> yes. >> on line retail, we saw retail sales down 0.4%. i wonder how much is -- >> i don't think people go on and make big purposes. that's why zillow makes sense to me. you're going to be home, cold, drinking booze, and looking at the next rental. looking at the booze charts you guys showed.

>> i think there are also some last-minute purchases. whether people are going physically or they're going online. they want those staples. they want to make sure that they got the extra battery maybe for the cellphone in case the power does go out. and maybe they'll order rush delivery. those are the things i like. >> or the extension cord for the snowblower. we need to let you get back to that. >> later. i can live. >> i wonder if facebook and social are seeing more traffic. >> i agree with jon on that. with amazon, q4 came in light. should have been holiday. there wasn't all the bad weather in q4. most of it came in january. didn't see a huge uptick in the amazon top line number for q4. that's why i'm circumspective about that argument. >> jon, thank you very much. we've been showing you pictures of nasty winter storms all morning. but things, of course, are getting worse in the northeast, at the same time the south has had a hard time as well. the weather channel's reynolds wolf is live in leesburg, virginia, with more on the

clear-up. over to you. >> that's right. let me tell you, we were going to do changes here. earlier the snowflakes and now we've got something different, a sound, a sound that you usually don't hear three seasons out of the year. this is not one of those seasons. this is winter and in winter we have the snowplows. this massive winter storm that came over effected the eastern third of the united states has caused quite a mess here in leesburg, historic district here in northern virginia. and you can see the hard work they're doing to clean up some ten inches of snowfall that started last night. basically came to a shut down two hours ago. we expect this to continue for a few more hours and then round two opens up later on tonight. possibly another three to four inches of snowfall. roads are in pretty good shape. you will notice this truck driving right on through. a lot of people trying to look at their community because they know that in historic leesburg, this is a very historic storm. biggest one they've had in several years and causing a lot of headaches not just on roads

but at the airports. reagan national, closed. now beginning to resume some flights. but still, major disruptions at both dulles and dwi. tomorrow they've already been cancelations for flights then. that no doubt is going to have a residual effect. all kinds of travel nightmares possibly through the weekend. although we're going to see this snow tonight, we're going to get a break tomorrow. temperatures above freezing by tomorrow afternoon. and then another shot of snow, not quite as heavy, but additional snowfall as we get into saturday. hey, that's the story here in leesburg. back to you. >> all right. historic leesburg, good to see you. snow just keeps oncoming. straight ahead, rick santelli tackles switzerland's wake-up call to europe. his take, nek. direction: up so we're up early. up late. thinking up game-changing ideas, like this: dozens of tax free zones across new york state. move here. expand here.

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coming up on the half, the deal of the day, comcast buying time warner cable. we'll find out which media stocks will be impacted the most. is the correction over? some at jpmorgan think so but find out which beaten up market he likes better than the u.s. plus, we tap the rockies with the ceo of molson coors. the company out with earnings this morning. guys, it's bottoms up at the top

of the hour. the dow making gains here. up 24 at the moment. dom, give us the market flash. >> let's check out goodyear tire. better than expected fourth quarter profit despite drop in sales that fell short of forecast. sales were hurt by third-party chemical sales in north america and $102 million hit this unfavorable fx issues. goodyear tire is trading up 10%. big move to the upside. back over the you. >> those fx moves turning out to be a theme, dominic chu. for more on the markets, rick santelli over in chicago. hey, rick. >> hi, sarah. well, let's look at all that is going on with trading. i guess the best place to start is the emerging markets, they were rattled a bit. our stock market, global stocks were rattled a bit. it lasted for a while and then we had four days of sunshine. yesterday we gave a little up. is that chapter all over, in your opinion? >> you and i talked two weeks

ago whenever in the tlals of the panic. wait a minute, things have changed. the most important thing is that you're not in a crisis because the currencies we're talking about and the emerging markets, they've been floating, floating currencies work. the brazilian real has depreciated 30% from where it was. it will take time for it to kick in. the measures in are place and people will have to start looking at that. and i'm going to go to a piece from professor chen at princeton who the fed loves. he wrote a piece talking about the great -- this was in november -- the great change was the difference in the way that emerging markets are funded now. it used to be that it was banks. bor reing from western banks, from the advance nation banks and that money was much more long term duration. now a lot of the funding comes in via asset managers who are much more prone to move quickly. so you start to see -- >> you take a bit of the

bureaucracy and slowness to react out of the equation. >> and then you give them, as john talked about, you give them to the etfs and the ability to move a lot of money quickly. you see -- >> the argument that wherever you are on the globe in this point of retracted globalization, you're going to protect the downside fat tails of anything that can go wrong. the price we pay for that is trimming the upside in terms of economic horsepower. the readjustments to the emerging markets to their new rates isn't going to be great for the economies. let's face it. >> it's the wrong way to go. >> yes. >> that's been their first response. that's the old-fashioned response. >> cross trades. everybody looks -- i do as well -- thinking that kerry was part of that, at least a bathroom meter of that. i look at the dollar/yen, eu euro/yen and pound/yen and there have been reversals for that. indication of future stock and treasure ry trades down the roa? >> the japanese had a g

gubernatorial election on sunday if result is that the nuclear issue -- >> litting the button because they're spending a boatload of weak in the yen. >> and japan hasn't gotten a kick out of the depreciated yen even though the -- >> because everything they're gaining on trade they're losing on energy. >> losing on energy. when the yen was at 75 to 80 for as long as it was -- >> t to go. i found this fascinating. yesterday we had our president and mr. hollande on the same stage. what about all of these french businesses going to places like iran. are you going to put the a bash on that? that's a weird question. they had a big drob drop on their earnings. one of the reasons put forth was the set aside for potential payments that had something to do with a sanctioned country iran. quick thoughts? >> let me tell you something about the french. the french are always the first to go where others don't want to go because their business follows the flag. what more interesting is that obama on the previous day

threatened, if you violate these sanctions we've seen the red line before. you know, let's not go there. the french are going to do what's good for the french. end of story. whether it's building nuclear reactors, whether it's selling -- they will do it. it's the history of it. >> they need to do something. unemployment, 12.1 is eurozone but euro is 11%. >> go back farther. if you look at -- when the united states stopped selling military goods, when eisenhower got pissed over the suez crisis, the french jumped in and started selling the powers. >> i think everybody out there probably has as much fun as we do. ira, always for taking the time. back to you. >> thank you very much for that. let's check on where we are with gold. we hit 1300. we touched it, we come back down. $1300 an ounce for the first time since november. clearly the bottom making some gins along the term chart. shares of cisco are having a

tough session so far today after what john chambers said last night. when can he turn the company around? jon fortt will be here to weigh in on that next. j ust drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. [prof. burke] at farmers,we make you smarter [bell rings] about your insurance,because what you don't know can hurt you. what if you didn't know that home insurance can keep your stuff covered,even when it's not at home? or that collisions with wildlife on the road may not be covered. and what if you didn't know that you could be liable for any accidents on your property? the more you know,the better you can plan for what's ahead.

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jon fortt. >> i don't know what they're calling me. >> what do you think of cisco? >> cisco is in a position of similar to intel and microsoft. it's got this core business en routing and switching that's historically been so high margin, so successful. now you're seeing that slow down for numerous reasons. one of them emerging markets. they're getting hit by the brick countries, slowdown as much as anybody. another issue is service provider overall. that business not as strong as it's been historically. at the same time there are a few trends moving in cisco's favor. they're backlog in enterprise is actually looking okay. the security business is picking up a bit for them. usc, unified computer servers, actually growing quite a bit but not enough to make up for some of these other pressures. plus, when you've got cloud, you've got bigger customers who can afford to put pricing pressure on cisco. that's when you're seeing gross margins. >> china was an issue for them. >> that's one of the bricks. yeah. they've been in the penalty box

for china, a bit. they complete with flyaway which is strong there. this nsa stuff doesn't help. >> john chambers is out and about spreading the message. is it doing the best that it can in difficult circumstances? >> john chambers and cisco have already said there will be a ceo transition. they pushed that out to the longer end of the time reinstatement. it's going to be a couple years. i think the argument is these are largely secular issues that cisco is up against. some of the same core issues that we see again. microsoft and intel struggling with, where the ground is shifting beneath your feet. gary moore is in position to possibly take that ceo seat. the tougher these conditions get the more cisco pulls operational levels. the stronger gary moore's hand -- the stronger his hand

gets. >> clearly there's a plan in place. the correction is timing. how much pressure is there. how much urgency is there internally and how much time written vesters going to give them? >> john chambers is not a founder of cisco. he might as well be. he's been in position that long. he was able to steer them through the dotcom crash when it looked like his whole plan has blown up. the board has confidence in him. the fundamental conditions haven't changed that much from last quarter when they announced a bunch of moves that we're going to make. i don't know if things are going to -- the pressure is amping up that much right now. >> all right. cisco under further pressure after that report. jon fortt. >> same pressure. >> same pressure continues. good point. all right. the orbitz of china soaring on massive volume. we'll take a look and tell you why, next. when you order the works

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welcome back to "squawk on the street." check out shares of c sdls trip.com. this is the orbitz of china, if you will. like orbitz, the chinese travel agency posted fourth quarter profits that beat estimates. oppenheimer lowered it and reduced its earnings estimates given the margin for 2014 but noted the ctrip remains a major

player in china's ota market. ctrip is soaring 13% on three times its normal daily volume. guys, back over to you. >> wow, more than 13%. and, simon and john, just watching the markets right now, looks like stocks are maintaining their gains after opening lower on disappointing retail sales and overseas factors. we're holding here with the dow up 18. >> top gain of goodyear on the results. who knew. that's a north american story. as, of course, is the big deal of the day for people that are just tuning in which is the parent company comcast and time warner cable. we'll look at more on that throughout the zigs session. >> it is the story of the day. $45 billion deal. you're watching drop box, jon? >> absolutely. denis wood side, formerly of google, going to drop box as the first chief operating officer. looking to see if they become public. interesting he was handpicked guy, motorola was blind sided

when google dropped him. now apparently going on to growth instead of going on to fix another company. >> that's it for this program, for "squawk on the street." all of those will be taken up throughout the day on the network as we approach noon on the east coast, let's send it over to the "halftime report" and to scott wapner. scottie, it's yours. >> thanks. welcome to the "halftime show." miami heat, the man behind the city's resure gent real estate market of where the best bang for your buck is right now. cable war, what comcast deal for time warner cable means for the industry and the other major media stocks. beer man, the ceo of molson coors on the company's earnings and what new markets they hope to tap next. let's meet today's starting lineup. pete najarian and simon baker and jon najarian, sarah is at the new york stock exchange on frozenomics. and steven parker, the head of u.s. multiasset