from the long holiday weekend and stocks are coming off their best week of the year. the s&p 500 has wiped out almost all of its losses for 2014. and is now just ten points below its record close of 1848 based on january 15th. among our market experts this morning, tom lee and barclay's, head of u.s. equity portfolio barry knapp. both men will join us on set at the top of the hours. on the agenda today, at 8:30 eastern, february's empire state survey. then at 9:00, december tic data which tracks corporate bonds and equities into and out of the united states. and now or later, housing comes into focus with this month's national association of home builders survey. today kicks off a busy week for economic data. tomorrow, we're going to get the ppi, housing starts and minutes from the last fed meetings. thursday comes cpi and lending

indicators. and friday, existing home sales. as for earnings central, watch for reports today from coca-cola, medtronic, more weejance cruise lines and others. then this afternoon, we're going to hear from companies like herbalife. ahead of all that activity, let's take a look. it's a mixed bag, plus or minus the flat line either way. >> scott, it is a short week, but it is a busy one. europe's activist is reportedly in advanced talks to acquire forest laboratories. forest value the it up to $25 billion. that stock is up about 18%. and the deal could be announced as early as today. mine while, hp executives reportedly knew about autonomy's accounting practices months before a whistleblower flagged them. you'll remember hp said it was a victim for having paid $11.1

billion for buying autonomy in 2011. but it was accused of overstating revenues before it was sold. they said a report was provided to hp after it bought the british softwaremaker. hp shares, mean wile, at the close of trading on friday, down slightly, but will move on that news today. meanwhile, a firm bought by hank greenberg says it will buy a multi plan. the deal is valued at $4.4 billion. now back over to you. >> thank you. and we have mergers, the whole world -- good things are happening. after last week's deal, it feels like we have more things coming up. >> people want to get stuff done. >> and we have more deal news this morning, which is that barry sternwick is in early talks about selling is his firm to the public.

starwood capital group has $34 billion in asset under management. the firm has stakes in hotels, office buildings, apartment complexes and shopping malls. speaking of possible public offerings, online music streaming service spotify is now recruiting a u.s. financial reporting specialist. this news is adding to lots of speculation that the swedish start up is preparing for a share listing. reports say the firm could be valued as much as $8 billion. that's more than like warner music. the people create the content. >> it is. and the last time spotify raised capital was, i believe, about a year ago. goldman sachs led that investment. so that's quite a hefty premium. >> right. but the artists don't make -- you know the content versus the king versus the content versus the pipes? we might be heading back to

pipes. kick starter is now urging users to change passwords after announcing it has been hacked. user names, passwords, meali i g mailing addresses and e-mailing addresses have all been compromised. but the good news, if there is good news, is that the credit card information has not been stolen. but, you know, i don't know if anybody has the same problem, but i basically have one password, maybe two, there's sort of a third special one. >> i do, too. >> how in the world can any one -- >> by the way, there's always sorts of software you can get, put your password in he ever else. >> but if you chaeng one of your passwords, do you have to go and change the other ones?

>> here is the trick. do you want this? i was told what you're supposed to do is come up with your password, don't say what it is. >> "squawk box"123. >> yeah. and then let's take it's a google thing. you could do gsquawk123. and then if you were on apple, you could do asquawk123. anyway, people say that -- >> interesting. >> but anyway, this is, by the way, the story of the morning if you buy a mile. could tesla and apple merge? not a joke. completely, at least. the san francisco chronicle now reporting that tesla's ceo elon musk met with apple's head of mergers and acquisitions last spring as analysts were suggesting apple acquire the electric carmaker. the reports suggest the meeting was a sign that apple was very interested in tesla. apple looking at the medical

devices business, specifically technology that can predict heart attacks. but i have to say, people say that apple needs an out of the box acquisition. that would be out of the box, slightly crazy. i'm not -- we should say in fairness, i'm not sure this will a real deal on the table as much as potentially a partnership around some of the technology that was going to go in the cars. >> we have very vague details about this. okay, yes, apple is the head of m&a is tesla's ceo met last month, but which came first? did the analyst report come out and tim cook said, hey, maybe i should see what the analyst of elon musk is up to? this came out and then they came out saying, hey, they could be -- >> i had conversation with this very senior tesla person probably about a year ago. and i said, so, do you think you could ever be bought by ford or gm or something like that. and they said, no, we would

never be bought by an automobile company. and i said what kind of company would buy you? they said a tech k company. >> maybe that's their ah-ha moment you to to by about that. >> but i think apple would be kill -- you deal with all these investors on your show. don't you think if apple announced tomorrow they were buying tesla, the stock would go down, not up? a car company. >> in the big picture, what does it really do for apple? not much, right? >> i think it's easy to partnership, the stock would go up. and if they were using their cash for something like that and it was so definitive and it was a permanent use of cash that people have been ruminating what they were going to do with it for so long -- >> is that what you want apple to do with its cash? there's a lot of other things out there that they could do with companies. >> i want them to buy sprint or t-mobile. i want them to own some of these things for a showcase network

with what's possible on one of they things. then i want them to wait five to ten years -- but andrew, it's not about what you want. >> i know. but the cellular service is going to get so good, i think this could be their entree into the home. >> maybe they could have taken a shot at netflix, maybe twitter could have been had at some point. >> did you binge? >> it's funny, because all weekend people were talking about people spent all of the lock weekend watching house of cards. no, i did that. it's sad. but it is so good. nine episodes in, so no one spoil it for me. but it is so good. >> i like the story, too. i hope we talk about this at some point. writing a story about what hp knew and when it knew it i guess about autonomy before that deal was made, about some of the

accounting issues that were there. the ft with a big article there today, detailing exactly what it says hp might have known to a string of e-mails. a pretty detailed investigative report here which is pretty interesting and has bigger implications, too. i think for the credibility of some of those who have spoken out publicly. ask questions about, you know, to meg whitman, what did you know? when did you know it and some of the other examinations at hp. hp has told a very distinct story for the entire time, that it was misled by autonomy regarding some of this accounting and now maybe other things are going to come to slight here. i also want what jim chanos is thinking as this article comes to light. >> it's interesting. but to what extent to companies consult auditors, past auditors about past audit reports? >> they don't and that's their

problem. >> because if auditors knew about this all along and hp was going to buy $1el 2 billion to buy a company a whole host of other companies passed on, wouldn't you -- >> do you blame the auditors, do you blame the board? do you blame the bankers? >> to a certain extent, i do blame the bankers. >> probably all of the above, but the bankers made, what, $50 million in fees off of this? and nobody decides to look under the hood for more than a second? >> and then got dropped, but after they got paid. >> after they got paid. what's going on in vegas? >> las vegas sands has brought its websites back online. a hacking attack forced the company to shut its home pages and other online operations last week. employee e-mail was targeted in that attack. and the company says it's working with investigators to identify who defaced its webb pages and exposed sensitive employee information, including social security numbers. now to the latest on bitcoin,

major exchange. users should soon be able to withdraw funds from their accounts. the japanese based site is the second biggest exchange in the world. a halt in withdraws last week left customerers unable to transfer their investments into u.s. dollars. as a result, the price of the virtual currency plunged to below $300 on the mtgox exchange. that compares to a figure of around $650. >> now, while you can, if you think this is a -- are you a bitcoin believer or do you think it's a farce? >> i haven't taken a side on this one. i thought the rise was spectacular. i did feel wary about the strength of some of these exchanges. but if you have money in there and you can't withdraw it, that's scary. >> your point, you wonder if the fall is going to be as spectacular as the rise that you decided, right? between the regulatory stuff, people are starting to take a bigger and closer look at

exactly what it is. >> a piece that ran, it was awesome in terms of an explanation. it was the first time i ever ever convinced that the thing could be real. maybe not at $300 a pop. >> but his company owned that, right? >> i get that. but there's something to be said. >> for someone as well known and as dignified as him to have taken an interest -- >> i like dignified. that's a nice work. he watches in the morning. he does. we may get an e-mail from mark this morning. he might be on holiday. >> that's how kayla rolls, right? dignified. >> capital "d." there's a lot moving in europe throughout the morning. time for the global markets report. carolin roth is in london to tell us what is happening. what do you think? >> we're seeing a bit of red, but nothing to get too worried

about. what we're seeing in the markets is essentially profit taking. time to take some profits and, today, we are seeing the markets just off the session lows that we hit earlier on in the session. but i want to show you what's these individual markets are looking like. the xetra dax is off by 0.1%. the ftse 100 now flat, and the ftse mib, which it seems from outperformance earlier on in the session and over the last week on the back of the political changes in italy is now also dropping by around $4%. we have lots of economic news out this morning. zew, the index for investor and analyst confidence was a little mixed. we saw this unexpected drop in the headline number, but the current conditions number, that came in slightly better than expected. i want to show you the reaction in the currency markets. we saw the euro/dollar moving just off the session highs, but it is still up by 0.2%. overall, we're seeing a little bit of dollar recovery. especially against the yen. up by 0.4%.

now, no surprise, this came after the boj extended the lending program for banks and that makes some investors even more optimistic about further aggressive monetary policy easing. sterling/dollar, also one to watch. it is now essentially flat on the day. just about that 1.67 level. but we got those inflation numbers for the month of january, 1 .9% on the year. this is the first time that cbi fell below the boe anticipation target of 2% since 2009. and it's the australian dollar just above that 90 on handle, but down slightly on the day. back over to you. >> thanks very much. coming up, delivering alpha, we get a hedge fund report card. plus, more snow for the northeast. it's true. oots storm headed this way. >> already started this morning. it's awful out there. >> yeah. it's only supposed to be a few inches here in the city. >> more or less. >> and thank goodness we don't have to shovel for otherwise. that's one perk of living in an

ant farm light that. >> but in the burbs, not so lucky. another economic lesson for those stuk, "squawk box" is back. [ tires screech ] [ car alarm chirps ] ♪ [ male announcer ] we don't just certify our pre-owned vehicles. we inspect, analyze, and recondition each one, until it's nothing short of a genuine certified pre-owned mercedes-benz for the next new owner. [ car alarm chirps ] hurry in to the mercedes-benz certified pre-owned sales event. visit today for exceptional offers. ♪

more snow is expected in the new york city area today. when are we going to get a break from all of this? alex wilson joins us now with the national forecast. alex, please tell us it's sometime soon.

i can't take it any more. >> temperatures are going to warm up later in the week. that could cause some problems for the snow melt, so you'll have to keep that in mind if you live in any of on those areas that are flood prone. just get that snow away from your home so you don't end up with water around your house or in the basement. today, we are adding more snow to the picture. we have winter weather advisories, winter storm warnings because of those deeper blues, massachusetts, new hampshire and maine. snow falling in philadelphia this morning has caused some trouble for the commute. as you know, in the new york city area, the snow is coming down. a morning event for places like new york city. we will see the snow into the afternoon for boston. it has not started there yet. boston, you'll begin to see the snow and it will continue through the day today. the heaviest snow focused up into parts of new england, rain, new hampshire, massachusetts. and tonight, still heavy snow in portland up towards bangor. so this will be where the main event of this system is. but still, we will be watching for some accumulation. new york city itself looking at the 1 to 3 inches range.

those lower end totals towards philadelphia, 3 to 5 for that deeper blue. just upstate over into parts of connecticut as you see that 5 to 8 inch zone. really focused over parts of eastern new england, into massachusetts, around worcester, then 8 to 12 inches near the costal sections of maine including around the portland area. as we head towards the second half of the week were woog go see to see temperatures warm into the 40s and even 50s with the rain showers. so a welcome change, but kooep keep in mind it's going to let that snow melt quickly. >> thank you for that. we are waiting for that with bated breath, i can tell you. meanwhile, we want to sit and talk about hedge funds. joining us now on set is michael pelt, institutional investor's institutional investor. you guys do this every year. explain to the viewers how the methodology works. >> sure. we go out to investors,

foundations, endowments, pension funds, larger events, investors and hedge funds and we ask them to rate their managers. basically, we're looking at the 100 largest hedge funds in the world. from those ratings on eight different attributes, we calculate rankings and we actually give letter grades. >> so among the attributes, their actual returns, their risk tolerance, compliance -- >> right. the key three attributes are alpha generation, the ability to create good risk adjustment returns, risk management and alignment of interests. so that being the managers who have skin in the game is a key attribute that investors look for. >> so the big reveal, number one this year, is silver point capital out of greenwich. largely distressed, started by some goldman sachs alums. they were 21 last year. how did a firm like that make

such a big leap? >> the great thing about a firm like silver point is when times are good, often their strategy credit distress, it provides a nice uncorrelated return to what people are getting in the equity markets. yes, markets were up 30% last year, at least, you know, the u.s. equity market was. but for institutional investors in particular, they're not looking -- they're looking for uncorrelated returns. they're looking for, you know, some defense in case the equity markets go down as they did in january this year. >> what would be the distinction between if you were to rank them just by performance and then your ranking income to it, how different would it ultimately look? >> it would be very different. alpha generation is just one factor that managers are -- investors are looking at. really, the risk management alignment of interest transparency. the ability to know what people are actually doing. >> but my question -- every time i look at this list year to year, the firms change a lot.

the rankings change a lot. and i'm -- >> not in the top, though. >> i would have thought they would be more consistent if it really is about all these other things with the exception of the, you know, alpha generation. >> it's actually fairley consistent. if you look at the three of the top five firms, elliott, citadel, and adage. they were -- they all got as last year. they were all in the top ten. they all performed, you know, well year in and year out. >> to andrew's point, though, i would think that the investors, at least, who are giving you their input are putting out if a generation -- even though you have eight different categories with a much higher waiting than the others. is that fair to say or no? >> certainly it is the highest waiting and those three that i talked about, risk management, alignment of interest and alpha generation, those are far and is away the most important. >> because if an investor has an issue maybe with infrastructure or some of the other, you know, deals, but the fund outperforms the market, you know they're

going to say they love their guy because they generated so much for them. >> for sure. people are willing to put up with maybe lousy investor relations if they're getting great alpha generation. but it's about risk adjustment and returns. one of the things, if you look at the returns from pretty much every hedge fund last year, nobody did 30%. there was very few. >> and there's a lot of angst has been spilled over that. meanwhile, the market, as you mentioned, was up 30%. how did that affect investors in the type of survey and the types of things that were important to them? did you see a lot of investors xlaping? >> no. investors are actually -- i'd say some a little disappointed. for the most part, if they could get 10% to 15% a year, regardless of what happens with the equity markets, they're pretty happy. that's what they're looking for. if you look at their liabilities, if you're a big pension fund, people do 10% to 15%, that would be great.

>> as we rack up some of the well known names that are not on here, couldn't get their investors to talk or what? like appleloosa, for example. >> had great numbers last year, great returns. >> they killed it. and they're down on the list. >> we're going out, asking them to rate the managers in the top 100. if we didn't get enough investor response, we don't actually give them a rating. >> i didn't see the bottom of the list. bridgewater, for example. that's a firm that people like, traditionally, or they have. last year they -- their fund was down 13.9%, i believe that was the number, .therefore -- alpha generation perspective, you can't be a healthy camper. but the flip side is, i would think people would stick with them if all these other issues are upgrading. >> bridgewater, the last couple of years have been rather low, the returns for bridgewater. so i think there's been an impact on their ranking.

but last year, bridgewater was in the top five. and generally they've been in the top five in the hedge fund report card. >> and you think it's come down because they're losing money? >> well, definitely the returns are disappointing. >> in the d category, i'm seeing some familiar names, greenlight capital run by david einhorn, are they doing something wrong this year that you think they can fix for next year? do you think their fundamental issues with firms that are scoring in that level? >> well, one of the things is we're putting grades. it's comparative. so if you look, these are the 100 -- we've rated 47 firms. still, those are -- the top 47 firms in the world. >> but are investors upset about their returns in that regard or are they saying, bill ackman, we don't like you being out there publicly, david einhorn, we don't like what you're saying or we don't like the way you're communicating with us. look at both to have those,

greenlights and perfect square. >> if you look at personal square, i think the biggest problem there is one of risk management. that was where pershing square scored poorly. bill ackman is taking large betts and concentrated betts and, you know, sticking with them. if they pan out, great. but if you look at some of the things he did, jcpenney was one where he lost money and he stuck by it for a long time. and from a risk management standpoint, if you're an investor, you're thinking, well, maybe where is the risk management? >> you have a sense as it pertains to activist investors as that trend has certainly picked up. you know, they've never been more accurate, how that correlates to their end result, if you think that that will play a larger role in the way the methodology plays out in the year or so ahead? that activists will do better than others, worse than others? >> well, look at dan loeb.

dan loeb moved up from 18 a year ago to number two. his returns over the last four years has been incredible. it was anywhere between 20% and 40%, you know, three of the four years previously. and there is an activist who's not just an activist, though, he's making just really interesting eclective investments, you know, across the globe. >> thank you, mike. we've got to leave it there. that article on those rankings come out today. check it out. >> i'm going to check it out. thank you. >> you're welcome. >> that's fun. coming up, we're going to talk about some bing viewing, not here, but you weren't into the housing -- if we're talking about bing viewing in china. eunice yoon is talking to the man that is bringing "house of cards" to beijing.

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good morning and welcome to "squawk box" right here on cnbc. i'm andrew ross sorkin along with kayla tousche and scott wapner this morning. they're in for joe and becky, who will be back tomorrow. we have a number of headlines for you this morning. europe's activist is reportedly now in advanced talk to acquire rival drugmaker forest laboratories. here is the price tag, $25 billion. this deal could be announced as early as today. we hope we will bring that news to you 80s comes. china's central bank draining $7 billion from money markets after unexpectedly drained lick kwity for the first time in eight moss. the central bank is graduate to engineer a gradual upward shift in money. then as we fly over to japan, the boj there keeping monetary policy steady today and

maintaining its upbeat assessment of the economy. the decision was expected. the boj has substitute pat so far on launching a strong burst of stimulus last april. the nikkei rallied on the news up 3%. i don't know if you saw the "new york times" op-ed page today weighing in on what mario draghi should be doing. he said we're going to have deflation in europe, you have to print money. you never see the times get involved in these economically -- >> just when you think the role of the central banker is maybe going to start to fade into the spod light. >> no, apparently not. >> all your suspicions are concerned, maybe only here. that's all right. this week, markets will turn their attention to the fed's view of the economy. minutes from the fed's latest policy meeting are due tomorrow. michelle and dan are joining us here this morning. great to have you both here. the dow, s&p up six of the past seven days. do you see this continuing as the rest of the world seems to

be a little more settled and we appear to be a little more settled about it? >> i think it's all about earnings and actually top line growth is starting to look a little bit more attractive now. most of the companies that we sample in the small midcap space actually beat on the top line by a reasonable margin. and included very good acceleration on the bottom line. and i think that's an early trend showing that there's an underlying strength in the u.s. economy is that isn't widely recognized, whether it's the weather that is causing it or some of these probably short-term issues that i think have taken people's eye off the ball. but the economy is improving. it's a gradual and slow improvement. >> i don't see hear you voesing concerns about emerging markets or china or the nikkei or things like that. so are we moving beyond that? >> i think we are. i think the best gain remains in the united states. i think it's underappreciated, it's not viewed as cool and attractive. it's viewed as slow and lumbering. and i think that's a

misperception and that's a missed pricing opportunity that i think investors need to focus on. >> the data here in the u.s. has been squarely, at best. gdp forecast at the end of the last week started to come down. what's the real story? what's happening with the economy? >> well, i think it is hard to assess the true underlying trend right now because of poor weather conditions. and i feel like i've become almost obsessed, whether not just for our own personal reasons, but the data is impacted by it. so we've seen too weak job numbers which we think can be directly correlated to the cold weather and the snowstorms. housing data out this week will certainly be affected, retail sales. so it's hard to determine the underlying trend. the good news is that we ended last year on a healthy note. we were running at almost 4% for gdp growth in q3 .q4. we've stalled a bit with the latest tracking. but still, a healthy pace of economic expansion. so there is momentum. we think we'll get past the slow period and we're going to rebound in the spring.

>> michelle, physically, people can't got to the so buy stuff. they haven't been willing to break ground on a newhouse. that's the fear. but psychologically, do you think anything has changed in terms of views of the overall economy, personal finance, 401(k)s, the market, psychologically, is the consumer still in the same place? >> that's a very good point. and you can see the divergence when you look at the activity data versus the survey data. the university of michigan consumer sentiment held quite fine. you have not seen the s&p acceleration in the survey measures of the economy. the hard data, the sales data is where i think it's been impacted. so i think with the consumer, they're looking at their balance sheet, which looks much healthier, large gains in equity markets last year, and increasing home prices. so that coupled with incrementally better labor market activity, i think it does set the stage for healthier consume they are year. >> dan, the minutes today, maybe a little more important than

normal, just looking for any clues about tapering the taper or what the conversation is in the room? >> i think we're beyond that now. i really do. i think that we're trying to micromanage. bottom line is the commitment here on the part of our fed and central bankers around the world is to stamp out deflation. that remains the biggest fear. that's the big -- that's the elephant in the room. it's certainly not inflation. fears of deflation globally. >> did you see this op-ed? >> let me guess. >> the whole point was they believe europe is actually -- here it is. europe flirting with deflation. policymakers can avoid falling prices by stimulating the economy with lower interest. would you do that? do you think it's necessary? >> could you believe that's coming from europe who still thinks about why republican burning, white marks in the street because it was cheaper than burning wood. they've moved to -- that i think is very, very significant. that they are willing to inflate their way out of these problems. >> do whatever it takes, right?

>> there's a big lawsuit going on in germany right now over what the ecb is doing. >> well, there's a big divergence in terms of which country you're talking about. >> so there's that. and the ecb obviously has to look at the big picture and realize that defacing could spread. so if it's in the peripheral, they're trading partners with central europe and it is a real challenge and a big concern, i think. >> dan, japan, when you see what the boj is doing to spur lending, do you think it will work? >> yeah, well, there's so much accumulated savings there and they're desperate to get people to use some of that savings up and to just jump start the economy. so i think that's -- we'll see. i think time will tell whether those policies are going to work. >> guys, good to have you this morning. >> thank you. >> good to be here. >> you, too. coming up, a big weekend for netflix. the second season of "house of cards" rolling out all at once on friday. if you're like me, you knew

fairley well exactly what was going to happen once you sat down and watched that. did you know the show is a big deal in china as well? eunice yoon will join us with that story next. right now, the dollar index is at about 80.125. stock is back in two. . sometimes they just 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.

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welcome back on this tuesday morning after a long holiday weekend. it's time for your "squawk box" planner in earnings central, dow component coke sets the first quarterly reports before the bell. a conference call is scheduled for 9:30 eastern. among the economic reports, the february empire state survey is out at 8:30 eastern.

the favorite data point of our rick santelli will, of course, join us live with the release and instant market analysis. and in washington, president obama will travel to mexico for tomorrow's north american leaders summit. they'll join mexico's president and canada's prime minister. that's your "squawk box" planner. andrew. >> thank you, kayla. i also should thank the guys in the control room because they didn't use the awful music. but that's a separate issue. the second season of "house of cards" making its debut on netflix on friday. eunice yoon caught up with the ceo bringing the show to china. our morning on, her evening. eunice. >> hey, guys. viewers in the united states aren't the only ones binge on house of cards. after bringing saturday night live as well as the ellen degeneres show to china, the ceo

of the company decided to bring in u.s. local thriller "house of cards" to this country. now, he said that he is not targeting the masses, but is targeting the growing number of young chinese who love american politics. this is what he had to say. >> the chinese audience watch american tv shows. although the story is really not about the lives around them. it's about things happening in america in the world. it's not relevant to their lives that they live here. but because of the quality and the sus sense, it's universal. that's why chinese people, you know, they know good things. that's why they love american movies and the tv shows. . >> now, the ceo didn't disclose the deal with netflix, but he did say this is a one off deal. he said all of his money in terms of this deal comes from advertising. and he believes this is a very good model to help the u.s.

media companies bring their content and finally make money off of it in china in the fight against piracy. >> realready fought it and we won. now it's become a trend, become a spender of things. if you put out the website, put out the pirated american content, we're going to send a legal letter to them, they immediately take it down. if they don't, probably there will be -- really worried. i see no hope. but now i am very happy about results. >> now, you guys probably know that in the second season, there's a big china theme that's ongoing. i actually asked him if he knew about it because it's not exactly flattering of the chinese leadership. but he said he didn't know, but so far the government acceptsers haven't come in. he hadn't had any signs that, hasn't been blocked. >> one kwin quick question on this. in terms of hollywood exports,

it's always the big action film that works, it's not always a very american -- this sa veis a d.c. show. is there any anxiety that folks in china aren't going to dig this thing? >> not much anxiety at all. i mean, right now, he told me that some of the most popular shows that he shows, "big bang theory" he said is incredibly popular. he said "snl" and the ellen degeneres show have been much more popular than expected. of course there's a lot of subtit subtitling. but when there's a joke that they think the chinese won't get it, they'll put in pa tren thre an explanation on the box. and actually people are getting the jokes. so there you go. >> there you go. >> eunice, thanks so much. coming up, a big debut last night. jimmy fallon taking over as the host of "the tonight show" and

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welcome back to "squawk box," a live shot of times square there. i can't tell if the snow is still coming down right there from that shot. we should tell you what happened last night. jimmy fallon made his debut as the host of "the tonight show" last night. he brought the show back to new york. his first guest was will smith. the musical guest was u2. a parade of celebrities stopped by to settle a bet. >> to my buddy who said that i'd never be the host of "the tonight show" and you know who you are, you owe me 100 bucks, buddy. thank you.

>> where is she going to take the money from? oh, okay. >> get a room. >> and colbert does it in pennies. that's how i do it. i like that. >> oh, the poor soul that had to clean that up, probably. >> that's how i would bring pennies. >> that was good. >> nice to see him bring it back to new york, though, for us east coasters. >> for people who work at nbc. 30 rock has been under such massive construction for the last few months. our guests that have gone to 30 rock foot sixth floor have seen the furniture being shuffled out. there's been a lot of renovation and remodeling going on there. >> if you saw the segment with brian williams last night you'd

know that the color -- they painted everything pink. there's the hot tub and the urinal and all that. you don't know the jokes. it wasn't my jokes. they were told by jimmy fallon and brian williams who probably should have his own late-night show. i obviously have no business trying to retell the jokes. i will stop now. thank you very much. >> it's early. it's early. coming up, how frozen- frozen-o-onomics. >> it's frozenomics. >> it said frozen-o-onomics. >> you just read what's there. >> last time you threw me under the bus. >> i did and i apologize for that. >> you threw me under the prompter bus. that's how it's going to be between us? >> no, no, there's more to go. >> will stocks remain during the

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time to get ready for a fresh week on wall street. barclays barry knapp and jpmorgan's tom lee are going to give us their forecast, next. and another lesson in frozenomics. how the weather is freezing up the country's economy. and does you curl up with netflix over the holiday weekend. >> i don't know whether to be proud or terrified? >> the second season of house of

cards making its debut on friday. how should investors measure its success? the second hour of xwb "squawk box" begins right now."squawk b begins right now. good morning. welcome to "squawk box" right here on cnbc, little house of cards musical playing. i'm andrew ross sorkin along with kayla tauche. becky and joe will be back tomorrow. we'll have congressman paul ryan on the show this morning but nasty weather kept him grounded in his home state of wisconsin. we'll reschedule with him in the very near term. take a look at the futures, see how things are setting themselves up on this tuesday morning after this three-day weekend. it still feels like a monday. the dow would open up 7 1/2 points higher. nasdaq looking down at the moment. looks hike it would open off

close to 2 points. the ten-year as well, we're looking at a yield of 2.732. that's the number to watch. let's get you through some of the morning headlines. we have a potential deal that could get announced in the next couple of hours. the multibillion dollar pharmaceutical takeover deal could be imminent. this is it. "the wall street journal" reporting that ireland-based activist could be buying forest labs for $25 billion. the deal could be announced as soon as today. this could be a huge win for carl icahn who took a stake in forest labs and has a seat on the board. >> june 2012. they replaced the ceo just a couple months ago. >> his first assignment is to sell the company. >> he has a big position, too, 11.5%. >> single largest shareholder in the country. >> in a conversation we had a month or so again he'd been

happy with the job that saunders had been doing in the short period of time, the stock had had a nice little move. >> right. we will see whether that deal crosses the tape during "squawk" hours. the other headlines this morning, coca-cola, they're expected to report earnings during "squawk" hours at the bottom of this hour. analysts are looking for fourth quarter profits of 46 cents per share on revenues of $11.3 billion. we'll have those numbers for the year the instant they are out. >> the big thing people are watching for there -- >> ladies and gentlemen, we have a deal. maybe we should roll a little news alert. this deal happening, this is the forest labs transaction just crossing the tape as we're talking. give you a sense of it. thank you for that -- for rolling that. i'm trying to get to all of the numbers on this transaction. >> meanwhile, what you're looking at is a one-year chart, up 142%.

carl icahn's been trying to sell this company for some time. the company had been saying that it was worth more than some of the conversations with prior bidders. a lot more value created in the last 12 months. actavis, it's a generics and over-the-counter pharmaceuticals company is acquiring forest labs for $25 billion in cash and stock. it will be interesting to see how actavis stock responds to this. >> 86.94. the arbs have a spread to play there. we'll bring you more on that transaction this morning as we take a look at it. also, you might be driving an apple automobile a few years from now. this is -- i think this is the big talker of the morning. "the san francisco chronicle" reporting that tesla's ceo met

with apple last year. it doesn't necessarily mean that apple is about to buy tesla any time soon but points to apple's strong interest in getting involved in new product areas. for those that are saying tim cook is not thinking out of the box enough, this might shift some of the perceptions. apple buying a car company would be quite an out of the box thing to do. >> the thought was they had been talking about a smart watch. they never really went there. they had fun talking about going into the home but then google bought nest. they were talking about social media, but a twitter deal never materialized. they're talking about cars and medical devices. >> i love the idea of them doing this but i think it's crazy. market cap $25 billion. a year ago it was even higher. that would have been -- barry's here. would have apple stock dropped precipitously if they would have bought a car company. >> i kind of think so. sorry so say. >> it seems like

deworstification. peter lynch used to talk about deworstification. >> tesla stock up 435% in the last year, which is a confidence boost from the market. if they had done this deal a year ago, they probably would have gotten a better deal but you wouldn't have the positive sentiment around tesla, the talk that someone in every single state owns a tesla. this has been rolled out slowly but surely over the last year. >> tesla thinks they're a technology company. >> right. that's my point. as i said to you, i talked to a person last hour about a year ago who said we'd sell ourselves to a technology company. i thought that was google by the

way. if you were google and you wanted to do driverless cars, that's the company that would do it. >> i remember a lehman exec telling me in '88 or '89 that we could get bought by yahoo!. we'd be their content for their portal. that's when tech was kind of crazy. and i didn't really follow him. you know? >> now we're back, same place. the maker of candy crush sega smartphone game is filing fon an ipo of up to $500 million. the london-based company is king digital entertainment. candy crush, it's saga? i said sega. >> sega genesis. >> was launched on facebook in april 2012. it has been one of the most frequently downloaded free apps. >> you can tell i'm a big gamer

and i play candy crush many times. >> you do more productive things with your time. >> this just became such a huge -- i don't want to say fad because people love this game. people. >> reporter: spending hours upon hours playing candy crush. they couldn't stop playing it. and now apparently the trend has continued and they're finally using this not so volatile market to finally file for an ipo. >> real quickly, before we get to our guests, i want to give you more on this actavis/forest labs transaction. the stock price in total is $89.48 per share. 26.04 in cash and then 0.3306 activist shares for each share of forest common stock for those of you playing at home. should note this is a 25% premium over forest stock an a premium of 31% over forest's ten-day volume weighted stock

price. that's what the two companies are saying. we should also say if you look through this right now, the companies are claiming it will generate strong free cash flow in excess of $4 billion. they're also saying that revenues -- i think that's all we need to tell everybody right now. >> there's a plc for activists that trades on the new york stock exchange. that is up about 7% in the premarket right now. so 6% if you look at that chart as well. seeing a similar rise over the the last year but for a company that's issuing some stock to pay for this transaction, that's a vote of confidence for the market about the direction this is going. >> by the way, this is now the second deal that goldman sachs has not been a major player on in terms of advisory behind the scenes during the past two weeks. there was a question mark in where they were playing or not playing in the comcast transaction that took place last week. the story of the boutiques, green hill is behind this transaction, jpmorgan is on the other side working for forest. >> green hill has a strong form

ma practice, the lead adviser on most of roche's transactions. i'm not surprised to see them. it is a pretty big name to deal there. >> stocks logging their best weekly gains of 2014. that happened last week. let's see what will happen this week. we have a couple folks to talk to us about the shortened trading week. barry knapp of barclays, tom lee is chief u.s. equity strategist at jpmorgan. the question this morning is can we continue last week's gains? or was that -- you came on, you were on last week. you talked this market up. are you going to keep talking it up? >> someone had a finger on the up button, like an easy button at staples. >> what do you think happened last week? >> i think last week really showed that institutional investors had positions squared. so i think they started the year uncomfortably belong.

i think more people are comfortable with the idea that some of the soft data may be weather related. and then finally, i think credit has been acting great and stocks usually follow credit. so i think it's -- you know, i'm constructive. i think it's still very -- >> constructive? what kind of word is constructive. >> bullish. >> bullish? >> bullish, yes. i think money shou-- people sho be putting money to work here. >> do you look at the high yield index? what are you watching? >> i think the easiest way to follow what equities should do is look at high yield spreads to treasuries. and whenever those spreads are narrowing orallying, i think it means p/e should be expanding. >> interested related point about all this, if you look specifically at credit in retailers, there's been a whole bunch of situations where credit has been blowing out and

widening. and the discretionary sector in particular was really interesting. i think it's a fan femanifestat what tom was talking about, people being uncomfortably belong coming into the year. the number one reason most economists would cite why growth would accelerate is stronger consumption on the back of fading effects of tax hikes. that was an economist forecast. the sector had been the best performer. it was the most expensive by a fair bit of any of the ten economic secretary ares. and analyst estimates were elevated as well. naturally what happens in the first month of the year is that sector leads the market lower because expectations were outsized. then we get this whole weather event that exacerbates it. the longer outlook here from an economic perspective is favorable which means that any downside, like i think the market will struggle because of the fed normalizing policy.

the history around this is compelling. that still doesn't mean it's a big downside scenario. i've almost stopped calling it a correction. it's a pull back that happens. >> what is your downside scenario right now? how much farther would we have to go? >> it's basically every business cycle since world war ii when the fed stops easing. we won't call it tightening. they normalize policy. you get an 8.5% correction. it's pretty standard stuff. it lasts for two to three months. the market is stuck in a range and then the uptrend resumes. >> our taper is not standard stuff. >> it doesn't matter. >> it does matter. >> the same thing happened when the fed treasury court of 1951, they stopped buying bonds, you had a 7.5% correction. the p/e was 7.5 at that point. right? there's been other occasions where they've raised the reserve

requirement, other policies. basically that's what it's done. in the current environment if you think back to '10, '11 and '12, '10 it went down 17%, in '11 it went down 18%. in '12 it went down 10%. each one there was a program due to end on june 30th but in '12 they extended it. the difference was that 7% to 8%, which is the sames s as history. >> when will we figure out whether this weather thing is real or not? what's the cutoff for you? what are you going to look at? >> i think it's a good question. it's tough to know because how much of the economy has been affected by the weather. i just think it's going to be for investors, hard to figure out when we get clean data. i think it's sort of toward the spring. i think we have a few months where we're not sure if this is rebound if it's unusually cold. >> interesting point, though, if

you get this jump on the other side of winter, then we will be able to surmise that there was a pent-up demise that weather was real. i can't imagine it isn't real. >> the only thing that was disturbing to me last week, i think capital spending will be better. i think we'll get a second leg hot housing recovery. in the retail sales numbers they revised down november as well. december was hit by weather. but the fact that there was a downward revision in november was disturbing. because the narrative had been consumer cushioned a tax hike in the first quarter. it slowed in the second and third and picked up in the fourth. now you've revised a bunch of that away. it's clear or unclear how good a shape the consumers are actually in. >> you're sticking around for the rest of the program. you get to enjoy the snow right now, enjoy that weather.

thanks for being with us, appreciate it. the business of hockey in sochi, gary bettman will join michelle from the games. >> did you see that game over the weekend. >> i did not. i'm not a hockey fan. the snow has been falling on the new york city area. how much more nasty weather is on the way and what will it do to our economy? there was a lot of binge viewing with the release of season two of "house of cards." we'll check out netflix and whether it's a possible takeover target. more "squawk," next. 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. you want everything.orks

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welcome back. the snow is falling on the new york city area. just down the road from cnbc's inglewood headquarters, we find reynolds wolf in ft. lee on the jersey side of the washington bridge. how nasty is it out there for commuters this morning. >> to be honest with you, it's been hit or miss. we started off this morning, skies are relatively empty in terms of the snow and then, boom, everything started. it was intense to the point where it was difficult to see the toll plaza and the george washington bridge from this vantage point, don't panning over. it's hard to see due to the intensity of the snowfall. let's talk about the snow a b l bill -- bit. the snow is going to continue. we're going to get 1 to 3 or some parts may get 3 to 5.

by the time the afternoon comes around, two things will happen. drier air is going to come through -- this is nothing to beep about. warmer temperatures will occur. when you have the warmup, much of the snow we've got then morning is going to be going, going gone. as we get into the weekend, we'll warm up even then. until then we have to deal with what we have for the time being. new york is ready for it. they've had a big shipment of salt. the salt has been spread around the five boroughs. you have salt, the roads have been treated here in new jersey. it is going to be slow going for a lot of people. i mean, slow going anyway at this stretch of freeway. this is one of the busiest spots in terms of traffic on the planet. a lot of the kids not going to school today not due to the weather but it happens to be winter break. you have fewer cars on the road. that's got news. still, you're going to have major travel disruptions, maybe not just on the roads but the airports already had many cancellations and delays at the big three airports.

that should improve as we get to the afternoon. everything should improve as we get closer to the weekend with the warmer temperatures. done with winter. spring cannot get here soon enough. >> i'll second that, 0 days away. reynolds wolf out there by the george washington bridge for us. >> he has his pocket square and three-piece suit under that jacket. >> you know it's bad when the weather channel reporter is ready for the end of it. coming up, more on frozenomics and the broader impact on restaurants, travel and local governments. before we do that, let's get to michelle in sochi. >> oshie is now a household name in america. yet the nhl may not come back for the next winter olympics. why is that? gary bettman, nhl commissioner, braving the rain. ease join us right after the break. we'll be right back. peace of mind is important when you're running a business.

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all right. let's get right now to michelle caruso-cabrera in sochi with a very special guest. michelle? >> hey there, standing here and making me look like a wimp because he's not wearing a coat is gary bettman, the nhl commissioner. >> it looked colder in ft. lee with the snow than the rain here. >> it is, it is. we've got you on because there's discussions about whether or not the nhl will participate or cooperate in the next olympics in korea. after the exciting game that happened over the weekend, why is this a consideration? tell us your framework for thinking about it. >> first of all, whether or not we go to the olympics at all is a decision we make jointly with the players and the players association. so first and foremost, the players have to want to go, represent their countries. the good news is historically we're a sport that has a great tradition of international competition. our players love to represent their countries. the debate, question you ask, is one we've been dealing with for

the last 20 years. after each olympics we sit down and evaluate whether or not it makes sense to go. there's good to being at an olympics and there's some not so good. it's a balancing act. the not so good has to do with obviously disrupting our season which has a disproportionate impact on some of our clubs. we have some nhl teams with ten players here and some with two. there are 550 players who are on vacation. our teams will come back in a little bit different shape. and depending on where we. >> reporter: in the world has an impact on how powerful our presence is back in north america. >> i want to channel my inner nhl commissioner. i see sponsorships for the olympics now going for 200 million, the top sponsorships nearly $1 billion when it comes to broadcasting rights from just one organization. your guys give them the biggest events they have here. without the nhl players, you don't have a lot of the big ticket events. i mean, if i'm the nhl

commissioner, i'd say to myself -- >> i'd hire you as my agent. >> i deserve a piece of that revenue. >> we don't do that. >> why not? >> there are incremental expenses that we have that are picked up by the organizing committee, the ioc and the international ice hockey federation. what you've described is not in the cards. >> why not? >> they'll be an olympic hockey tournament whether the nhl players are here. the players as i said, like to be here because they love to represent their countries. they give of themselves. it's good for the game worldwide. whether or not it's ultimately good for the nhl in the middle of our season at an important time as i said is a balancing act. >> we understand the tradeoff is maybe instead you do a hockey world cup. >> which is something we'll probably be doing. we have a history of that as well, canada cups, world cups and we are with -- >> that would give you revenue. >> it's not just about the revenue. it's about building the game and having an impact. one of the things we have to

evaluate is being at the olympics, does that help grow the game worldwide? and particularly in north america where our franchises are. >> oshie is now an overnight sensation. >> i would guess this whole thing is marketing gold for you. if you could speak to that and what sort of evidence you saw post-vancouver. >> actually, we play to about 95% of capacity in the regular season and over 100% of capacity in the play. what kind of impact the olympics have in general in north america will tell you whether or not we get a pop. at the same time, this is the balancing aact, it breaks momentum for us. we lose 17 days of primetime exposure, of getting the type of coverage that we typically get for our games.

and when the games are on, for example, at 7:30 in the morning as the russia/u.s. game was on saturday morning, while a lot of people watched, it's not quite the same as playing our usual scheduled game. it doesn't mean all good or all bad. it's a balancing act. >> do you get a piece, gary, of any of the merchandise that is sold from any nhl player if they're wearing a usa -- if someone buys a usa hockey jersey of oshie, do you get a piece of that? >> nope. nope. >> not a dime. >> we're here for the good of the game. and i know a lot of people find that hard to believe but that's the olympic world we live in. >> the spirit of scott's question, though, oshie, like i said at the beginning, now a household name. >> yes. >> that wouldn't have happened without the olympics. where else can the nhl get that kind of composure. >> do you shut down for 17 days on the possibility, the serendipity that something like that happens?

depending on who's in the gold medal game will impact whether or not there's interest in the united states or in canada. go back to olympics where, you know, when we first went to nagano, halfway around the world and czech played russia in the gold medal game, it doesn't have quite the same impact. it's not all good. it's not all bad. >> we have to go. we have to hit a commercial break. we need revenue, too. more "squawk" coming up right after this. mr. bettman, thank you so much. >> thank you. >> good luck to you. pay my bill. phone: your account is already paid in full. oh, well in that case, back to vacation mode.

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that's what i'm talking about right there. [ cheers and applause ] [ female announcer ] control your tv with your voice. the x1 entertainment operating system. only from xfinity. welcome back to "squawk box." we have headlines for you. we have a big deal on this tuesday morning. ireland's actavis is buying forest labs in a $25 billion cash and stock transaction. forest lab shareholders will get a little over $26 and a share of actavis share for every share they hold. both companies are noted for their generic drug business. as we said earlier, a good deal for carl icahn who owns about

11% of that company. he's the second largest shareholder, got involved in 2012, has a board seat as well. other news you should be watching, spotify may be moving one step closer to an ipo. the swedish -- sweden-based company is seeking a u.s. financial reporting specialist. that's the assignment, increasing in speculation. seekers say spotify could be valued as much as $8 billion. the last time they valued themselves about $4 billion. we think goldman sachs has a small piece of that, maybe even a big piece. get ready for more powerball fever. the jackpot is up to $400 million, one of the biggest jackpots the multistate lottery offered. the biggest ever, $500 million, won by one player last year. >> we'll abstain from calling

you a moron just yet. >> thank you. >> coke earnings, they get 46 cents ex items. that does look like a match. revenues appear to be just a hair short of analyst expectations. the stock is trading down by a fraction of 1% in premarket trading. we'll dig through this report and get you more details as soon as we can parse through it. hitting the wires, coke looks like a match on the bottom line. >> maybe to the top line a bit, mukthar kent, to that point, the issue with coca-cola has been slowdown in growth in emerging markets, bad. slowdown in developed markets, bad. fighting it sort of on all fronts. >> and the green mountain deal. >> and the green mountain deal, a good deal but it's not going to move the needle. >> i'm laughing. i don't think it's interesting.

i don't think it's transformational. >> maybe it's transformational for green mountain. >> potentially. >> for coca-cola, the impact is much more limited. >> the figure that most people in the market are watching for is the possible decline in carbonated beverages, both pepsi and dr. pepper did see a decline. coke outperformed its peers. there's an expectation that coke could outperform. they're seeing a 2% headwind on net revenues from currencies. that's a 4% hit on operating income. when you see the volatility, you're maybe not hedged against, for a company this big and diverse, that will hurt in a year like the one we saw. >> i haven't seen anything on the dividends. i don't know if the guys in the control room have seen anything on that. we should watch out for news about the derivative being up at coca-cola as well. something they have consistently done for 50 years. we'll see. let's get a check meantime on oil and natural gas prices. joining us now is john

hofmeister. also is christy tizak. john, i'll good to you first. we'll start with oil if you'd like. we're back at 100 on wti. where do we go from here and what do you think the impact will be. >> i think we'll float around 100 for a while. you know, the supply/demand relationship, anything we see out there, i wouldn't say we're overly tight but we're not overly supplied either. opec is producing about as much as it can. the good news is, the u.s. is continuing to increase its production. but that's largely good for the domestic market. doesn't say much to the global market. we decrease our import slightly. i'd say more of the same as we've seen the last few months. >> christy, is that the way you see it? >> i think what we're seeing is continued strength in these markets and that's going to

persist for a little while. >> john, i guess more substantially, lately just because we've all been under the deep freeze, especially on the east coast, is the move in natural gas prices. how sustainable do you think that is above 5 bucks? >> i think we're going to see $5 for a good part of this year. the reason is, we have used so much natural gas from our storage that we have to refill that storage to get ready for next year. we're at a ten-year low in storage. and so it's going to be a good year for drillers and the supply chain as we refill that whole storage system. if we have a hot summer, and we use a lot of natural gas versus coal for electricity, for air conditioning, it's going to be a robust period where i think we could see high $4, low $5 gas for much of this year. >> christy, oil is clearly in john's wheelhouse. i'll get to yours, that being the utility system, the grid and how we distribute energy around this country.

how would you say it's fairing in the wake of certainly one of the most extreme winters that many of us have felt in an awfully long time, if ever? >> well, i think one of the things we can be encouraged by is although we put this tremendous draw on the natural gas system and we are really pulling down storage, one of the things we are seeing is we are getting the gas there but just barely. we really need to get more infrastructure, particularly into the northeast of the united states where the increase reliance on natural gas is becoming more acute. we need to build more pipelines and get those cited through the regulators and approved. these are the things i think will help keep prices in the $5 range on a persistent basis but we did see spikes as we were challenged to deliver that gas to consumers. >> john, speaking of pipelines, keystone not mentioned in the state of the union. your reaction to that and how we should all be thinking about that process going forward, say, over the next 6 to 12 months.

>> well, as many people have said, i'm not the first, this has become so politicized, so unnecessarily politicized, that now everybody's watching whatever secretary kerry says, whatever president obama says, and this is ridiculous. i mean to put it very bluntly, this is a no-brainer decision in terms of the overall economic health and well being of the country. because pipelines are part of the infrastructure that the president has been pushing for five years. and because this particular pipeline is something that, you know, some of his financial supporters object to, there's a whole lot of people out there that need this pipeline as not only a statement of how we interact with our canadian neighbor to the north and how we supply ourselves 20, 30, 40 years into the future while that pipeline delivers. but it's also a statement about how broken the political process

is in this country where both houses, the senate and the house of representatives, majority says do it. and the president is all backed off and kerry's all backed off. i think it's nuts the way this political process is playing out. i get irritated at the nonsense we see when we could be employing people, we could be building the infrastructure of the country and taking care of our energy security needs in decades ahead. >> that was definitely irritation and excitement. >> there's passion. >> i have one if you like. john, one of the things we heard this year, this is barry knapp from barclays by the way. you were going to get a tremendous amount of oil shut in on the coast much like it did in cushing in 2012, which would create a huge positive refining market spread this year and would put pressure on gasoline prices.

how do you think that's unfolding? do you think that's likely to be the case or do you have a different view on that? >> i think what's happening actually is with the southern half of the keystone xl which the president approved even though he didn't need to, the southern half is now emptying out some of the extra storage at cushing. that oil is being refined. the refiners are able to export the finished products. we're sort of draining off some of that excess capacity at cushing and selling it so the refiners are benefitting from selling it as export production. it would be nice if we could sell it as domestic product by getting rid of some of the nonsense rules in this country, like the jones act. but we have to export it because we can't ship it to the east coast except in jones act ships. we frustrate ourselves once again. i don't think we'll see the buildup in cushing anytime soon including that pipeline. >> guys, have to leave it there,

christy and john. >> thank you. >> another round of snow and ice to washington, d.c. to maine. how will the snow impact this quarter. and netflix taking advantage of its series of qus house of cards." but could it backfire? binge viewing versus scheduled viewing. green arrows across the board. the dow looking like it could open up 32 points higher. back in just a moment. ron: i'm never alone with scottrade. i can always call or stop by my local office. they're nearby and ready to help. so when i have questions, i can talk to someone who knows exactly how i trade. because i don't trade like everybody. i trade like me. that's why i'm with scottrade. announcer: ranked highest in investor satisfaction with self-directed services by j.d. power and associates.

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welcome back to "squawk." the credit card issuer capital one recently sent a contract update to card 40e8de eholders. it may contact you in any manner it chooses, calls be e-mails, texts, faxes or a personal visit to your home or place of employment. just a lesson not to throw out those direct mailers because they will find you. >> a credit check. if you don't pay, they think you're a deadbeat they're coming

to your office. >> don't they run the commercial with the barbarians? >> what's in your wallet or whatever. either alec baldwin and the barbarians are going to show up at your house or what. that's a hell of a collection agency. >> it's unclear whether this is for collection or customer service. a lot of customers will be interested in that. the northeast is getting hit with another winter storm. it's a fast mover. a significant warmup is on the way which could mean major flooding problems. joining us now to talk about the economic impact this winter is having across the country is paul walsh, weather and business analyst for the weather channel. good morning to you and thanks for helping us through this long and seemingly never-ending winter. the question remains, yes, we'll get a warmup later this week but how long will it last? and is there still more cold weather even after this blip? >> i think the warmup we're seeing is a head fake from mother nature. it won't last. this pattern that we're in is

long-lasting. we're looking at least a couple more weeks from very, very cold winter which obviously doesn't body well for the balance of q1 and a lot of businesses. >> we know when the groundhog sees its shadow and goes back in the hole, you get six more weeks of winter. that happened this year. how far will this bring us out? you said a couple more weeks. is that really a couple weeks or are we looking at the end of march in the northeast? >> at least for the foreseeable future it's going to stay cold. at least the next week to ten days. the next week will be bitter cold. one of the things we should be optimistic about is that spring will come. pitchers and catchers have reported. i'm very confident that when we get closer to the sun, the weather will warm up and i think that will actually be beneficial, particularly for the retail sector. cabin fever becomes a real issue. from my perspective, i'm ready to get outside. that translates probably across

a third of the u.s. population. when the weather breaks, and it will, it may not be until the end of march, we'll have a strong reaction from consumers and i think there will be a significant benefit on the backside of this to the economy in general and retail specifically. >> when that cabin fever sets in and these consumers can finally break free from their houses do you think they'll be interested in buying the things at the stores? that's always the question, there's spring apparel out. there's already spring sporting equipment out. if the weather is still holding in this pattern, then how much are they actually going to be purchasing? >> i think when you look at it from a comp perspective, that's another benefit in terms of the retail industry. last year was one of the coldest springs on record. it lasted all the way through most of may. this year from a comparative perspective we have pent-up demand. by the time we get into march and april, we have a later easter this year, we have an easy comparison to last year. when you put those two things

together, we're looking at some pretty significant upside for the back half of q1. it might not impact the entire q1 but for the back half of it it's really looking positive. we have to get through the next couple of weeks of brutal cold weather and snow. >> paul, there are a lot of retailers who hope you're right as do we. we are very interested in having warmer weather. for now, thanks for joining us. >> me, too. coming up next, netflix sees a viewership surge after releasing its latest house of cards. the stock is sitting at an all-time high. reed hastings has the company hitting on all cylinders. that still to come. still to come, marc faber, author of the "gloom, book & doom" report is our guest.

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with the children. [ british accent] watch bravo! yeah, i want to see "the real housewives." rewind! yeah! jimmy? it's been hours. we told you the x1 entertainment operating system show me "the tonight show starring jimmy fallon." that's what i'm talking about right there. [ cheers and applause ] [ female announcer ] control your tv with your voice. the x1 entertainment operating system. only from xfinity. welcome back to "squawk box." netflix subscribers showed a lot of love for season two of "house of cards" on valentine's day. joining us now on the "squawk" news line, richard greenfield, media and tech analyst at btie. he joins us now.

this stock has gone on quite a run. does it make sense anymore? >> look, i think the stock has gotten pretty expensive. when you look at -- this is now a 26, $27 billion company. it's probably worth, if you were to break apart time warner, twx shares, it's probably trading for as much, if not more now than what hbo is valued at, which is pretty incredible. there's no doubt, look, i love the series "house of cards." i'm through three episodes after the weekend. but when you look at the consistent quality and the amount of programming that a network like hbo creates, it does make you wonder whether hbo within time warner is substantially undervalued or whether netflix is getting overvalued. >> let me ask you a question. hbo and i should say, i'm semiconflicted because i made the film with them. i'm in with them. they made $1.8 billion in

operating profit 2013. netflix, 228 million, yet domestically netflix has more subscribers and continues to grow. will they ever be able to catch up, just looking at those numbers? >> remember that netflix has a much higher profit. what you're looking at is substantial investment overseas. they're plowing the vast majority of the dollars they make in the u.s. they're plowing a substantial amount of profits back into growing yaefr seas. if you like the story, you believe in their long-term growth prospects overseas. obviously the skeptics believe that is tossing money down a drain. this is, from a stock standpoint, think of it in some ways like amazon. in jeff bezos people trust, that's why they allow him to continue to invest and operate at a very low margin. i think netflix is similar. when people are confident in

reed hastings they allow him to invest and build for the future even though the profitability as you point out correctly is not even close to what a company like hbo generates. >> do you buy this, there was a big article "new york times" in the over the weekend, jeffrey catsenburg has said the fact that netflix has exploded in success, i think there's a fiction that somehow netflix's gains are hbo's losses. is that right or wrong? >> there is plenty of room for multiple large svod. when you think of subscription video on demand programmers who are making their own constant. this is not -- why you subscribe to hbo, most of the people watch when you look at total hours watched on hbo, most of the stuff you watch is the old movies they have access to, similar to netflix. most of the stuff watched is not "house of cards." there are great statistics that

everyone will quote from valentine's day. what you end up doing, whether it's "house of cards" or "true detective" it's what gets you to watch. the real question that everyone needs to be asking is not hbo versus netflix but as hbo as netflix, as showtime, as these channels like amc, fx, as they surge, what happens to broadcast television? who's watching broadcast television on friday night? 45% of total viewership is broadcast tv. that i think is in serious distress over the next five or six years. >> to that point, one of the things that's been raised even over the past week, given the comcast transaction with them buying time warner cable, do you see another operator prying to guy content vis-a-vis nbc, vis-a-vis netflix. >> comcast could do this on their own. they started stream picks.

it's your parent company. i don't think there's a consumer that walks around and say that was an awesome pic on stream pics. there are certainly as you get to afoot print that reaches 75% of u.s. internet households, there's certainly no reason why you couldn't begin to market a service far more aggressively and also invest. >> does directv try to buy this? does ecostar try to buy this? >> the valuation is up to $27 billion. this is no small bite for anyone. the real question is whether somebody who has a large internet infrastructure tries to compete more aggressively. even amazon isn't competing nearly as aggressively as we would have expected at this point. the studios have hulu which

they're starting to invest more in and create more original programming. i'd be surprised if one of the big companies that didn't have an internet business tried to bite this off. i mean, directv which you mentioned tried to buy hulu. we're talking about a billion dollars. this would be just a large-scale acquisition. >> got it. >> i find that very, very hard to faj zblthfathom. >> how do you feel hastings feels about the stock? >> i don't really understand why stock splits matter to anyone. i look at google and google seems to be doing just fine with the stock split. >> people have suggested maybe to make it more accessible that they should split the stock. >> we had a buy on netflix last year from 170 in april to 300 plus in september. t

the rise that's gone on, even when we downgraded it, i don't think the price of the stock is having impact. what people are seeing in netflix is, they are creating great content. people like owning media stock. >> we have commercials unlike netflix. thank you for being with us. we appreciate your time. we have marc faber coming up right after the break. >> thank you. tdd#: 1-800-345-2550 trading inspires your life. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads...

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gloom, boom and doom, why marc faber thinks there are better places to be than the stock market. his latest read on the stock market and what he thinks of janet yellen's stay the course policy. >> it's been a rough winter for many people, including retailers. reaction to earnings from coca-cola. what the sodamaker is saying about the global economy and how it can affect your portfolio. the final hour of "squawk box" begins right now. ♪ welcome back to "squawk box" here on cnbc, first in business worldwide.

i'm scott wapner in for joe kernen. ok kaelin toush -- kayla tauche also in for becky quick. my mother's maiden name, my grandfather asked me to use the name when i was an intern at "new york times" for my first article, which i thought would be my first and last article. i was there for the summer, that was supposed to be in. >> i'm going to rebrand is barry charles. >> you can hyphenate if you wanted to. >> it works. >> some people have problems with it. >> works for criminals, right? >> take take look at futures at this hour. i see how things are setting themselves up this morning for those criminals out there with

three names. dow jones looks like it will open up higher. the s&p 500 up getting close to 2 points higher. we have big headlines, including a deal on this tuesday morning. actavis is buying forest labs for $89.48 per share, represents a 25% premium to forest's friday close. that's a $25 billion transaction. we are back. looks like we have an m & a frenzy on our hands. carl icahn tweeted a short time ago. great result for all shareholders. enjoyed gain in market value of approximately $17 billion. >> i think he got a board seat in 2012. on this morning's economic

agenda, february's empire state survey, coming at 8:30 a.m. eastern time. at 9:00, december data which tracks the flow of treasuries and corporate bonds of equity into and out of the u.s. housing will come into focus with this month's national association of home builders sure way. the corporate buzz story of the morning. a report that tesla ceo elan musk hemet with the head of apple's ceo last spring. the report suggesting that the meeting is a sign that apple was very interested in buying tesla. i don't know if they were buying tesla or wanted to partner with tesla. the idea that apple is speaking this far outside of the box, talk about wearable watches, it's not wearable. the car wears you, basically. i don't know. i still think they made a better decision. we would have liked to see them buy something. i think a car company might be

too big to swallow. >> chewing off a little bit too much maybe? >> a car's a lot. $25 billion. >> if it does work? >> you're the next gm? i don't know. >> the amount of capital required to keep a car company going and keep upgrading it. >> the companies you talk about buying, netflix and tesla, they're incredible expensive companies. they may have huge potential but they don't trade at eight times earnings. apple trades sat a low valuat n valuation. you're using your cash or stock at a low valuation to buy something at an incredibly high valuation. historically that's -- >> these are companies that have argued they are at such high growth in the past -- >> there's always a next door. a lot of these things will work over time. amazon was a great company in the late '90s that traded at 300 times earnings. >> another company that was

great in the '90s, coca-cola. >> didn't trade at that kind of a valuation, maybe 69 or something during the nifty 50 era. >> it is liquid. >> good one. look at that. >> we have something flashing on the screen that says segue. >> coke had earnings out this morning matching estimates on the bottom line, slightly shy of estimates on the top line. we want to get more on the numbers with bill schmitz, equity analyst at deutsche bank. he joins us on the "squawk" news line. thanks for joining us. the takeaway from the quarter doesn't appear to be much to write home about. we saw carbonated drinks value up 1%, flat for q4. i think a lot of people were expecting that to be up slightly. were you surprised? >> not really surprised. it bears the global macro, right? north america had positive volumes. but, yes, the trouble spots are

the trouble spots. not much of a surprise. plus there was a lot of pricing in the quarter. if you look at coke's guidance for the year, they're telling us currency alone will have a 7% negative hit to their operating profit. >> and 10% in the current quarter as well. but when you think about these head winds, did coke do something wrong or is this just par for the course? >> no, i think it's par for the korgs. obviously weather didn't help either. but, no, coke, they're re-investing. it's another big restructuring program. they're going to find more savings and re-invest more back into the business to try to drive growth. it's just a lousy environment out there. >> you're confident that environment won't be too volatile for coke to be able to manage around it? >> obviously there are challenges. we're cautiously optimistic. >> the outlook is not stellar, not terrible. how does weather play into a company like coke? we've been talking about it all morning with regard to apparel and some of the other retailers. how does it affect coke?

>> it affects coke more than most. the good thing is, this is not a very strong period for soft drink volumes frankly. when you get into the march and june quarters, that's when it starts to matter. and thankfully, the weather comparisons are very, very easy going into 2014. so hopefully we don't have another really frigid spring and early summer. but that's when weather becomes critical. >> we only have a little bit of time, bill. someone on twitter said the stock is as flat as an old soda. do you think green mountain was the catalyst it needed or does it need something more. >> green mountain, that investment is so small and the duration is so long. >> thank you. i'm glad somebody said that aloud. >> coke's been a great investor, though. you saw they bought that stake at less than 75 bucks. you see where green mountain is trading now.

>> they made $400 million on paper already. >> the whole idea that this will transform the soda drink business forever and that we're all going to have these machines in our house. >> no way, no way. >> i have a britta in my house but i still drink bottled water on occasion. >> what do you want to hear from that company on investment today? >> i want to hear them talk about what they're seeing market to market. it look like china and yan got better as the year progressed. brazil is very small, very weak relative to what we were expecting. just like the walk around the globe, talk to us about what they're seeing right now, what the outlook is for now. >> bill, thanks for joining us on the talk line this morning. >> sure. of course. thanks, guys. joining us on the "squawk" news line is marc faber, publisher of the "gloom,

boom & doom" report. >> thank you for having me. >> size up what's taken place over the last week. everyone was worried about a correction of some magnitude taking place as a result of worries about emerging markets, perhaps a china slowdown. we have the best week of the year for the stock market. what do we take from all of that? >> well, basically miss yellen will continue the policies that have been implemented by mr. greenspan and mr. bernanke, and continue to ease. that is the takeaway. so stocks rebounded. but for most indices we haven't made any new highs yet. we may still do it at a later point but in the meantime, the

gdxj, is up 53% since december 25th. and other markets say vietnam is up 13% this year. there are other markets that, in my opinion, are far more attractive than the s&p 500 or the russell 2000. >> i don't think you could -- i certainly think you could make the argument that there are other markets around the world where valuations are much more attractive, perhaps, than they are here in the united states by virtue of the 30% gain or so that we had last year. but there's also obviously more risk. do you think that the concerns we had over emerging markets were overdone? do you think we should still be fearful of what's taking place in some of the emerging markets or not? >> yes. i think you need to be fearful. if you take a view for the next five to ten years, and you look at valuation of u.s. equities

and the valuation in emerging economies, then i think i can make the case that over the next five to ten years i will make more money by buying now in emerging economies than in the u.s. having said that, i think it's still too early to make a major commitment to emerging stock markets, except as i pointed out before, in vietnam or maybe in iraq. but in general, i think it's too early to do it. they can still decline. on the other hand, in the u.s., it's probably too late to buy, because on march 6th, 2014, we are in a five-year bull market and by the end of march, we will be in the second longest bull market for the last eight years. and usually these long bull markets, they end badly. in a crash like in '87 or in a

significant decline like after march 2000. >> right. >> or after october 2007. so i don't think that it's a very opportune time to buy equities. >> okay. mark, thanks for calling in today. appreciate having you on. we'll talk to you soon. >> my pleasure. thank you very much. >> marc faber. >> man, he knows how to make me feel down about things. coming up, american ice dancers taking gold. plus, a big moment for the men's bobsled team. we'll head to sochi and get an update on what to watch for today at the winter olympics. we head to a break. check out the "squawk box" market indicator. when you order the works you want everything. an expert ford technician knows your car's health depends on a full, complete checkup. the works. because when it comes to feeling safe behind the wheel, going the distance

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welcome back to "squawk box." let's head to sochi and get an update on the ak at the 2014 winter olympics. cnbc's chief international correspondent michelle caruso-cabrera joins us now with more. michelle? >> hey there andrew, let's start with the medal count. russia leads with 19. total medal count, russia and the u.s. are tied.

they're also tied in gold. russia has more silver as well. norway has 18 total, netherlands 17, canada 16. the u.s. made history last night when charlie white and meryl davis won the gold medal in ice dancing. the u.s. has never come out on top in this event. davis and white recorded the highest free dance and overall score ever. you can see an interview with the winning pair in the 10:00 a.m. hour of "squawk on the street." >> steven holcomb and steven langton took a medal in two-man bobsledding, the first since 1952. this is the fourth sliding medal for the u.s. in sochi. still no medals for the u.s. speed skating team, even though the long track athletes switched back to their old suits. under armour is on the defensive save some of the athletes saying

the mach 39 created too much drag. we have short track tonight, the women's 3,000 meter relay, the men's half pipe, speed skating, the men's 10,000 meter. always watch curling on cnbc between 5:00 p.m. and 8:00 p.m. guys, back to you. >> can you tell us, we love kevin plank. what really happened here on the speed skating thing? didn't they put the suit in a lockheed martin wind tunnel and all this stuff? >> yes. rigorously tested for sure. they developed it along with lockheed martin. i think some of the concern, i spent a lot of time reading about this, they didn't get the suits until almost before the olympics started maybe they should have had more time in them, et cetera, et cetera. there's all kinds of theories down here on the ground on why the speed skating team which was

expected to medal in many, many events, has come up completely short. there's two kinds of speed skating, long track and short track. the long track has gone back to the old suit. the short trackers still in the new suit. no medals to be found regardless. did something happen in training? should they have been given the suits earlier? it's very controversial. >> you didn't hear complaints after the prelim heats. it wasn't until after the event were over and we didn't medal that you started hearing some of the complaints. look, there are those who are saying that it's sour grapes. we all want our guys and gals to bring home medals but some people out there are saying sour grapes. >> oh, yes, because as under armour has pointed out, by the way, u.s. speed skating pointed out very good times were put in during the practice sessions. and before the actual medal rounds got under way. and so what happened isn't quite

clear. the one coach is quoted as saying they trained at high altitude and they should have trained at low altitude. at high altitude the ice is harder. at low altitudes it's softer. everybody has a theory. >> under armour, i wear under armour stuff all the time. it doesn't help me. >> i feel bad raising the issue that it could be sour grapes because all of us want the men and women over there representing the united states to come home with medals. at some point -- >> "usa today" had an yard line today about how under armour from a pr perspective, even with this going wrong has done everything right. the number win thing is not blaming it on the skaters. they have been the last to do that. >> next time i have to buy a gym shirt, i'm going going to buy an under armour shirt. >> you better check the drag first. >> you might not be able to get up to 7 on the treadmill. >> if your last time is a little

bit lower than normal. >> there's a story about them training at altitude that may have impacted them. >> the prelim scores were great and they were wearing the suit. how is it possible then that -- i don't know. i don't know. >> just saying. coming up, a big debut for jimmy fallen in new york. some highlights are next. "squawk" will be right back. ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting wherever you are with the mobile trader app from td ameritrade.

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welcome back to "squawk box." jimmy fallon making his debut as the host of t"the tonight show" last night. he brought the show back to new york city roots. first guest is will smith. the parade of celebrities stopped by to settle a long standing bet. >> to my buddy who said that i'd never be the host of "the tonight show" and you know who you are, you owe me 100 bucks, buddy. >> we're not showing lady gaga image. >> there she is. >> i'm worried about where she's

taking the money from. >> how did that joke play in the 7:00 hour? >> not well. i thought i'd try again just to see how things went. >> robert de niro, kim kardashi kardashian, mariah carey, stephen colbert, lady gaga. >> this is how i'd do, $100 in pennies. >> a lot of good reviews overnight. this is the cover of "the new york post," fallen nails is big time as "tonight" comes home. here's jimmy on the cover. nice to have him back in new york and have "the tonight show" back in new york. coming up, i don't know how he's going to have a harder time getting guests in given the weather issues. >> thankfully it's new york city. there are good celebrities here. >> getting to the studio, the same issues we have here. okay. >> more snow for the northeast, has the wintry weather impacted the bottom line for retailers? we take a closer look at the

sector with dana telsey in just a bit. green arrows across the board, the dow looking like it would open 23 points higher, the s&p 5001.5 poi 500, 1.5 points higher and the nasdaq up 3 points higher. back in just a moment. peace of mind is important when you're running a successful business.

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welcome back to "squawk box" this morning. let's look at some of the stocks moving in premarket trading. forest labs soaring on news that it's being acquired this morning, $25 billion, cash and stock, actavis is the buyer. the acquiring company stock often goes down on the announcement of a deal but take a look at this one. that is not the case this time around. actavis shares are jumping on this transaction. take a look at shares of tesla, rising after that san francisco chronicle report we've been talking about all morning that tesla elan musk met with apple's m & a chief last spring.

waste management did raise it's quarterly dividend by 2.7%. i wonder, do they do snow removal? >> i don't know. >> i mean, a lot of the big waste guys -- you know where i'm going with this. >> i got you. okay. i want to know what apple shares are doing this morning. can we see apple premarket? we've seen tesla move this morning. if apple did do this, you think the shares will go down. >> maybe people think this is good, they are thinking out of the box. >> at least they're thinking about doing something with 150 billion. there it is. i don't know. >> marginally up. we should also note the market, premarket looks marginally up as well. >> the nasdaq by the way has been on a pretty darn good run. >> up 1.6% this year, the only index that's in the green for the year. the dow has 420-ish points to make up before break even.

the nasdaq is doing well. >> tech and health care, the two of the s&p ten sectors that are trading at a one-year high. >> we'll see how it all shakes out. empire state is just out. rick santelli is at the cme group. steve liesman is here on set to talk frozenomics. rick, do you see the numbers? >> yes, i do. 4.48 is the number from a nonrevised 12.51. that was january, this is february. and how does this number stack up? well, 4.48, you know, it kind of fits into the range and 12.5, one was on the high side of it our last look. as we come in, we can see this number is putting more downward pressure on interest rates. so instead of kind of looking at 2.75, we're looking at 271 on our way to 270. the dollar is stronger against

the yen. lately that means carry risk-on trade. that has been in a funk on the correlation of the last several days. we'll have to wait and see if the fixed income markets were any indication, i would think it's going to be an on-pressure equity day. that's my opinion. >> i want to know if a number like this will take into account weather, to what extent it would? >> manufacturing would be upset by the weather. it begs the question, scott. if the economiers think it's the numbe weather, why do they keep missing the numbers? maybe something else is going on. i think there's other weakness in the economy that's worth talking about. you had a hit from interest rates you had a lot of gdp or growth in the last half of last year. you have some pay back on that. inventory drawdown. i think there's more than just weather happening here.

>> steve, the thing that occurred to me last week that i thought was interesting notable was when you had the retail sales number, you had the back revisions. now, some of the december downward revision you could attribute to weather. what about november? >> november was colder, also. i have a quote what jim o'sullivan, said we have no doubt that harsher than usual winter weather was a major factor. in november doesn't make any sense. you're right about that. that's a factor. we brought down the holiday sales numbers. >> right. remember the general narrative was the consumer cushioned the purchases. slowed in the second and third and it was supposed to pick up in the fourth and it's not clear it actually did pick up. >> i think people are confused. one of the reasons they go back to weather is because everything else tells them for reasons you just gave us that the economy should be picking up. >> right. >> you see it in the stock

market. the stock market -- the capital spending numbers have gotten better, too. >> that's a big factor. >> credit has also gotten better, which is another thing we've been watching that's another thing that's pretty key. when you look at the downgrades, if we go to the gdp chart, doesn't look that bad. we did 4.1 in the third quarter, we revised down from a 3.2 initial to 2.5 or 2.4. people are expecting, you know, 3 plus in q2. >> late last week you started to get a drop in numbers from almost everybody. >> everybody came down mechanically or from an accounting identity. they say this number came in lower. it's a sense of what happened. we track the tracking now. that's one of the things we're doing, barry. that's come down sharply over the course of the quarter. >> to what extent do you think -- what will you be looking for within the fed minutes that can help us understand how much weather is a real impact or not or what at least they believe it to be or not?

>> i don't need to read the fed minutes, scott, to know the fed is intentionally interested in the weather effect. they're looking at things like population adjusted heating degree days. so they look at the temperature in the country. and they look at how much the colder than normal temperature affected what population. they're going to figure some stuff in there. they're going to look through that and then you have paul walsh on earlier. he said we expect a bounce-back. they're going to look through that, too. they're not going to get too excited about the remount and how many pent-up demand there is. some sales you lose and you may not get it back. >> we were talking earlier about the fact that easter is later. yes, we had thanksgiving later. we have bought a little bit of time with easter. do you think that holiday for shoppers matters, and the timing of it? >> kayla, i'm not going to get too uptight about that kind of

stuff, the idea that easter is three days longer, what is it, two or three weeks later than it normal happens? the economy is growing in that 2%, 2.5% range. the later easter could affect the data and make us feel differently about something at the moment. it's going to take a lot to shake me from the notion of 2, 2.5. i'd like to see 3 for an extended period. it seems like we can't get there and stay there. >> the equity mark set priced for an acceleration to 3 this year. all the way. >> there's no question about that, right? we had brief periods where cyclicals outperform. growth failed to launch. same thing at 11, 12. those cyclical stocks outperformed. >> you talked about that. >> market is there, right? if it doesn't show up, if we're stuck 2 to 2.5, that's a -- that will make for a difficult period. >> when stuff like a weird easter comes in, look right

through that and say i'm in this 2%, 2.5% camp and i'm waiting for evidence if it's 2.5 or 3. worried if it gets to 1.5 to 2. tune in for my interview with john williams, san francisco fed president tomorrow at noon. he's also a good confidant of janet yellen. >> the workweek actually ticked up a little bit. it did not fall. which you would have thought would have happened if -- >> let me throw you the evil counterfactor. what could have happened here? that's part of the calculation as to what's going on. >> steve, you have a good number of people who are hoping beyond hope that the fed tapers their taper. i mean, the reason why the market reacted the way it did when yellen was on the hill with a more hawkish statement and more dovish answers to some of

the questions in the market perceived her to be more dovish. >> i think people misunderstood janet yellen. to me she's straight on with, basically she set a high bar, scott, for what -- notable change in the outlook is what she said. she didn't put a number on it. to be notable -- >> what's notable, a couple bad job reports, manufacturing reports. >> it's like saying, period. you keep your doctor, period. put any qualifier on it you want. you don't think she could change her mind. >> she could. >> that's all that matters. everything after that is meaningless. really, it is. >> no, it's not in the sense that we're talking about what the market heard and thought and what she believes. >> just like weather. don't you find it fascinating with all the economists and analysts perusing the data and all the models they can't give

us a weather effect on data but yet they tell us about global and climate change, global warming, global cooling. >> the economists don't do that, rick. you're mixing up the professions. >> of course not. but i'm saying one profession with a small little effect is lost in space and then you look at the global picture with global scientists and they can figure that out. >> they're looking at data for climate change offer a period of decades. we're trying to figure out a period of weeks. what the weather effect has or hasn't been. >> i'm trying to figure out next quarter. >> next quarter? what about next week? >> i think scott, a point though, is that the equity market participants view yellen as dovish and think that if there's any down side risk like we talked about the various puts, the greenspan put, bernanke put, whatever, things go south, she'll stop and that will cushion the downside.

>> she said several times we'll look at the whole picture of the data that comes in between now and the march meeting. we've seen mixed data so far. do you think it all -- >> it's not noh notable. whatever that notable standard is, we're not there yet. i also think that what's important, what barry said, is whatever yellen is, it matters significantly what the committee is. i don't see the committee as being significantly more dovish. >> did you see the op-ed about europe? >> they're talking about draghi. >> they're so good at u.s. economics now they've decided to bring the franchise into advice and opinion on european economics. >> we'll leave it there. thank you, steve. thanks to steve, rick. guys, for your instant analysis there. we'll have more "squawk box" after this break, including a weather update, what it means for retailers. make sure you keep it locked to cnbc "squawk on the street." we'll have the beauties that grace the cover of "sports

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confident retirement approach. now you and your ameripise advisor can get the real answers you need. well, knowing gives you confidence. start building your confident retirement today. welcome back to "squawk box." another winter storm impacting the northeast this morning. alex wilson from the weather

channel joins to us break it all down. >> we have winter storm warnings, weather advisories once again stretched across the northeast, back into central pennsylvania and eastern ohio. most of the action will be focussed into parts of new england today, that darker shade of blue is the winter storm warning that we have in effect for a lot of those counties. we've seen new york begin to see that snowfall lighten up. it was particularly heavy a few hours ago. things improving. up into connecticut, the snow is falling and boston is going to be one of the big snowfall winters, especially parts off towards their west. we have heavy snow in the forecast for today up into parts of new england. they'll have the heavy snow out there from portland towards bangor. we have snow further off towards the west with snow showers into parts of vermont and new york state. accumulations shape up like this. 8 to 12 inches in to coastal maine, that darker shade of purple, the lighter shade of purple, 5 to 8 inches coming your way.

lesser amounts heading down towards new york. new york probably done with the snowfall for now. we were watching a second area but i think it will weaken and shift off to the north. it will be an impacter for parts of the northeast. warmer days are ahead. temps in the mid-40s tomorrow and thursday, even 50s in washington, d.c., by friday, 51 in boston. here's the day, the snow that's on the ground will be melting as the temperatures warm. we also add rain into the mix. that could heighten the issues as far as floods goes. we'll have to watch for that towards the end of the week, particularly on friday. >> the rain at this point the lesser of two evils. >> i think everybody is done with the snow. they're saying, okay, but with the rain and the warmer temperatures comes the melting snow and rain on top of it. yes, break out the spring raincoats. >> thanks for bringing us up to speed. appreciate it. >> sure. has the cold winter put the consumer in a deep freeze where

spending is concerned? joining us now, dana telsey, ceo and chief investment officer of the telsey group. we spoke to paul walsh from the weather channel earlier this morning. he said we're not out of the woods, we have at least two weeks, maybe a month left of this. how much worse could it get for retailers? >> i think it is worth for retailers. the month of january and february, we're fortunate it's a small portion of their overall sales. they'll have to take markdowns, given that the first hit of spring merchandise is supposed to sell during presidents' day weekend. >> people don't necessarily want to be buying bikinis and resortwear when it is 10 degrees below 0 and there's three feet of snow on the ground. how does the inventory mix look when you go to the stores? is there too much of it, is it the right mix. >> most of the clearance merchandise for winter has been sold through. in the stores there is a lot of

the spring merchandise, whether it's the t-shirts, jeans or dresses. it's lighter colors but also a lot of prints and patterns. it's getting into the spring mood with not a lot of winter goods left. that's why we're seeing accessories sell better than apparel. >> you mentioned discounting. will retailers come in as weak as they were during the holiday season. >> you have a bit of march to be able to recover. you'll see accelerated promotions, deals and loyalty programs in order to drive people in the store. traffic has been weak. online hasn't been that much better. it certainly is a little bit better but we need demand to pick up. >> you would think traditionally if people aren't able to go to stores, they're curling up with ipads or laptops and shopping online for the things they still need to buy at least. wian is the that happening. >> the consumer has a buy now, wear now mentality.

buy now, wear now when it's slows like it is in the northeast and midwest, hard to buy the spring goods. the weather getting warm at the ened of the week, it's amazing what sunshine does for people. i think we can see increase in traffic if we get some of the warmer weather. >> i don't get the online piece. i think people would be sitting at home clicking away. >> even if all they want to wear pajamas. >> conceptually, people talk about when you're stuck inside, people watch tv. now they play on the internet, right? >> they do. one of the things they're buying -- they're not buying apparel. they may be buying hard goods or some of the items for computers, may be buying things for their homes. we've been seeing durable sales up around midsingle digits compared to general merchandise and clothing sales up low single digits. there's a real discrepancy. >> when you think about easter, dana, does it matter that easter as a holiday falls later in the calendar year? like thanksgiving this year had a big effect on the length of the holiday season for

retailers. does easter matter? >> it typically does help that easter is later. buy now, wear now. you can wear the goods you're buying. on average, the month in which easter is, there's a 300 to 400 basis point same-store sales lift. that should help us. we're not going to get apples to apples sales comparisons until you get through april. this weather is an impact. we need to see an increase in traffic in order to be able to see what the real sales cadence looks like. >> what are you buying these days? >> listen, i go to stores all the time. if i see something i like, i want to buy it. i'm looking for new. that's what the search is on for. >> dana, let me ask you quickly. the prospects for a jcpenney in the current environment, if you think it will be even more promotional going forward as a result of the weather we've been

seeing. the stock is now back above 6 bucks. what's the prognosis for jcp in the current environment? >> we touring some of the jcpenney stores in some of the most productive malls around the country last week. the home area which is going to get the new assortment in at the right price points in the month of march is probably going to be one ever the changing signs of how jcpenney is doing. they'll compete on price, the gross margin will be under pressure, getting the brand news familiar in the store like st. john's bay and home are really going to tell us if we can see a pickup in business as we head towards the middle of the year. >> you have had the exit of some hedge funds out of that name. i wonder what impact that will bring if you have big names exiting from perhaps helping to prop up the stock at all. >> i think one of the key things is fundamentals are what works. we need to see pick ups in sales and then you'll be able to drive investor interest.

weak sales doesn't help anyone, whether it's jcpenney or the other retail names. >> dana, pressure time as always and your expertise. >> thank you. thank you for having me. coming thank you. thank you for having me. coming up we'll play one of my favorite games, what would you do if you won the power ball lottery? buy a mansion, give it to charity. your chances and how much is the line when we return.

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welcome back. take a look at futures and we've got green arrow across the board, not across the board, the dow looks like 8 1/2 points higher and the s&p flipped around red to green and nasdaq up three points. making headlines, don't let

the snow keep you from becoming a multimillionaire. the power ball jackpot is now up to $400 million one of the largest prizes in lottery history. the next drawing is scheduled for tomorrow. your chances of winning the big prize? here it is. 1 in 175 million, so you got to feel kind of special. >> so, you're saying there's a chance? >> there's a chance. there's a chance! >> there is a chance. >> you want to go in or no? >> i'm in. i'll go in with you. >> you'i'm going to get my own. >> you aren't going to throw me under the lottery bus, are you? >> we're good. we're good. we'll get it together. $400 million but it's after taxes is the other problem. lump sum or yearly installments? >> lump sum. >> why not. the lump sum probably gets it to 30 or 40. >> if i physically buy them, do i get extra? >> barry was noncommittal there.

is it us or something in the barclays policy? >> no, no. i never buy lottery tickets. i don't gamble, you know. >> during the commercial break when we were talking about what we did -- >> you said i don't know what i'd do if i won the lottery. coming up market thoughts from our guest host and make sure you keep it locked to cnbc, "squawk on the street" will have the beauties who grace the cover of "sports illustrated" swimsuit issue. "squawk box" will be right back. 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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welcome back to "squawk box." we'll get final thoughts from barry knapp. >> this is the op-ed, the truth about the 1%, we've had so many conversations about inequality a and this piece suggesting actually that it's not as unequal as others have suggested. by the way, myself. >> there's a whole body of work about that, but we had a discussion with steve liesman that growth comes from the increase in stock of capital and labor or the thing that connects the two productivity. so, all of these programs that redistribute income and all create disincentives to work that's the whole cbo, obamacare

controversy that came out a few weeks ago. it's not really a controversy, it's good economics. it's an decrease in the stock of labor. you need to invest capital. people at the top invest their money so that gives you an increase in the stock of capital. you are just not going to have stronger growth unless we get back to investing. >> as the economic historian that you are, you don't believe long-term inequality becomes a problem or not. >> when you have big periods of innovation, you have that and over time the benefits accrue more broadly, that was the part of the book "the great leap forward" the depression masked a huge increase in productivity that extended for 30 years and income distribution that tightened a lot during that whole '40s, '50s, and '60s period. >> you wouldn't agree with larry summers who said it's at risk from a "downton abbey" economy.

>> i am not a keynesian economist. >> i have not been keeping up with "downton abbey." thank you for being here this snowy tuesday. this was a lot of fun. make sure you join us tomorrow. "squawk on the street" begins right now. ♪ 's ♪ good tuesday morning. hope you had a great long weekend. welcome to "squawk on the street," i'm carl quintanilla with sara and simon hobbs, and jim and david are off today. we're coming up with the first two-week win streak of the year and the s&p ten points from break even for 2014 and ipo news and m&a and earnings and the ten-year note yield is 10.73 and we'll get data and fed speak and overnight in japan the nikkei posting its best day since august as the bank of japan