so, i think to the extent there were fewer investors it frees up the market for first-time buyers. >> david, thank you very much for joining us. pleasure talking to you today. >> good to be here, becky, thank you. >> okay. >> are we finished? >> we are. >> can you spell box one more time? >> b-o-x is how you spell it. "squawk on the street" is coming up next. ♪ everything that kills me makes me feel alive ♪ good tuesday morning welcome to "squawk on the street" i'm carl quintanilla with jim cramer at the new york stock exchange. faber is off. got new data on housing. case-shiller is just out and we'll talk to robert shiller in a little bit. in the meantime turnaround tuesday apparently in play. futures are higher. a lot of data coming our way this morning. ten-year yield plosser and williams are on the take today. plosser with some important comments to "squawk box" in the last couple of hours. europe mostly in the green. germany up 1.5% although

business confidence there down for the first time in five months. our roadmap begins with the nasdaq looking to turn around a second consecutive slide in biotechs, deterioration in what some of these momentum stocks we say. cloud storage firm box planning to raise over $250 million in an ipo and list under the ticker box. reports that manager knew of the gm ignition problems prior to the launch of the cobalt and withheld some vehicle data. first up the nasdaq hoping to rebound the morning after the selloff which saw the index closing at 5 1/2 week lows and biotechs took a hit and tesla and netflix. we talked about it yesterday, and wonder if this is a longer-term dynamic in terms of leadership. >> i think that gilead comeback yesterday was significant but a lot of the others didn't. you know, we're going to be talking about box filing and i look at that offering and i say or drop box, too, i say, these are the kind of companies that are putting a lot of pressure on

the rest of the companies. people will sell high multiple to sales in order to get on other high multiple to sales in order to get a pop. as long as that happens i can't be sanguine about any ever recovery. gilead was major league oversold. but, remember, if you have more biotech companies coming public people will sell gilead to get into those, too, you need to see the competition from ipos cease. >> how much of the money is rotating from the high fliers into safer, high-yielding names? plosser today talking about, you know, 2 -- somewhere in the 2s in terms of rates in 2015. >> it's happening. we saw it with the banks. the banks just keep going higher. jp does that go up on cavanaugh. i thought there was a chance he might one day, well, let's see -- >> mike cavanaugh. >> shocked. >> going to carlisle as a co-president and was largely seen as somewhat of an heir

apparent when dimon eventually exited the firm. >> i thought that. i look at that and say this is a good example, if that stock can power higher, it doesn't matter. people want to be in lower multiple stocks a lot of the lower multiple semiconductor stocks kind of held up well yesterday and the industrials. the industrials you could argue they could be hurt by russian sanctions, nobody seems to care so -- >> russia voted out of the g-8. >> see you later. >> and market's, like, what, we don't care right now. >> i was shocked. germany -- europe is up, germany does a huge amount of business with russia. they said let's put it aside. i don't like it either. one day people wake up and say wait a second. there's a new float of a chinese stimulus plan. i hesitate to say these things because these are central casting when you go down people start talking about a chinese stimulus, when you go down people start talking about peace breaking out. i got a new one. this one is astonishing, the

ruble indicator. the ruble was higher today which indicates that maybe the sanctions won't play that big a role or the sanctions are done. people are taking their cue from the ruble. it's insane. >> that is insanity. although some dow theorists are looking at that more tried-and-true theory. >> yes. >> the transports did set a new high in march. industrials failed to confirm, things like that. >> that i'm totally on board with. i love to see the rest of the market catch up. there are a lot of dow stocks that are doing quite well. i mean, yesterday i focused on ibm versus splunk versus "mad money." splunk is without a doubt the best analytics data company. ibm was very strong yesterday. ibm no one has a profit in it in the last year, ibm, warren buffett has stuck by it, ibm has big cash flow and earnings. splunk has a big multiple to revenues, not earnings. it's just a casualty. now, when you look at splunk for the year it's up nicely.

someone that owns splunk might say when it rallies today, hey, i got a chance to preserve my gain. i think there's a lot of gain preservations. a lot of the biotechs that are selling off, they're up huge year over year. >> sure. >> why not sell gilead, again, i really like gilead, why not sell gilead and get into biotechnology "x," it doesn't matter. i was looking at my twitter feed going over today at 4:00 a.m. because i am completely psychotic and i had a nightmare from watching "true detective." and i'm saying i can't keep up with the developmental biotechs. >> yes. >> you look at them and they're just a sheet of paper but that's what people want versus gilead. gilead got knocked down because of waxman saying something, got knock down because the scripps didn't blow away for hep-c and it's remarkable and the insurance companies like it and they'll pay for it. i understand if you can sell that and buy endocyte. i like tried and true.

i don't like the rotation. the rotation is to end, carl. has to end. >> whether it's biotechs or ipos box jumping in the ipo waters. the cloud storage firm filing plans to raise up to $250 million in an ipo and list on the big board under ticker symbol box as the company faces intense competition from drop box, amazon, google, microsoft. box's ceo actually addressed that issue recently on our program. listen. >> we have very healthy competition in the market. i think our unique differentiation is we're probably the only company that has a focus on the end user and consumer from a delight and a user experience standpoint that can also deliver their technology in the large enterprises. >> he owns 4% of the stock and is closely associated with the brand. >> closely associated with summit high school. now, that's okay. we know the younger, the better. >> yes. >> when a 5-year-old goes and

has a ceo -- who is a ceo, i want all over it. box is actually really terrific because box is corporate, it's enterprise. i like that even more than drop box. i wonder why hasn't apple bought drop box? why hasn't ibm or microsoft bought box? >> karen swisher said it was on a would-be less for microsoft. >> i thought for sure microsoft would buy it. the one thing i don't like about this market the public market is paying far more than microsoft was. they have a great balance sheet but they're not into buying high growth, high multiple to revenue stories and apple obviously is and i'm sure they are watching. cramer, what a joke. has he done any work on us. i've done a lot of work on drop box i think it's a great place to put your pictures if you are with apple. and howston is a bright guy. you say, wow, they're young and you look at zman and the guys behind google and you say, eight, listen, youth, they own it. >> yeah. as they say in the prospectus we

do not expect to be profitable for the foreseeable future, how important is that? valued at $2 billion back in december. >> it's the amazon model, people keep thinking, do you know what, work day, do you know what, concur, do you know what, amazon. these guys are basically -- splunk. they are saying -- you always hear the same thing the opportunity is so great we can't afford to be profitable. it's a very venture capital mindset it works if there are only a couple of these but when there's, like, 20. >> sure. >> suddenly -- i'm waiting for software as a service company that tells you how to turn the lights on. wow, you put this in, it tells how to put the lights on. and tells how to make lunch. and it becomes such a buzzword that, again, there's too many of these. they're not dot-comes because a lot of these companies really do have great businesses but how many can you buy off of multiple to revenues, carl? you can't. >> yeah. >> they got to stop. some deals have to stop, you know, amber road came. amber road's a fine company.

it's also, by the way, identify think it's from plank road brewery, amber road. >> fat tire. >> i'm being facetious. have you watched -- some of these in the aftermarket are doing quite poorly and you go on your twitter feed, what do i do? what do i do with amber road? well, what is amber road? well, amber road is -- i think it's budweiser. maybe it's a mexican beer, right? it could be a mexican beer. >> your point's well taken and in terms of levie it's been does he does business with a smile and a quip and some of his tweets demonstrate that. this is what he said about going public, ipos if you stock shoots up, you left money on the table. if it drops, you screwed investors. if it's flat, you're boring. >> that's right. if i were aaron levie and i've seen him many times he's very bright -- speaking of "true detectives" think of how they made matthew mcconhkoconaughey,n

do that. i've seen it on the movies. >> there is more fallout this morning from the gm ignition recall. "the journal" said documents showed gm managers knew of those ignition woes before the 2005 cobalt was launched but felt drivers could safely steer a stalled car off the road. also "the times" says that back in 2009 co-call black box data confirmed a potentially fatal defect but gm told accident victims' families it lacked evidence. they're getting pounding on two fronts. >> the charitable trust owns this and you don't want to read the stories because the stories are so horrible. they are just so horrible. you read this stuff and you say this is your worst nightmare some family member has been hurt or killed and you really did believe that there was nothing wrong. this is terrible. >> i've seen some technicians charted out. death cross over the 50 and the 200 intersect. >> it yields 3.5. it's got a much better balance sheet. look, my charitable trust --

beside myself because when you reeffed the stories and you really don't want to be affiliated with the company at the same time it's inexpensive but you don't want to be affiliated. how many people were in on it? it's not asbestos, though, asbestos brought down a lot of companies. >> we're not talking about a union carbide. >> no. >> so, you are going to ride it out? >> yes, i am. obviously these are great lawsuits if you wanted to bring them and there's lots of problems. we don't know who was in charge of the company. it's kind of murky. that said i just feel for everybody and anybody who lost money. this was -- you got -- i mean, you really got taken. when we come back, what is the state of housing in this country, in your part of the country nobel laurettereate rob shiller will join us. and it appears to be a tu turnaround tuesday. ay.

let's get back to the key housing data this morning the latest case-shiller shows the pace is slowing the ten and 20 city composites rose 13% year over year but the 20 city

composite posted its third consecutive monthly decline. robert shiller is a nobel laureate professor of economics at yale. great to have you back. good morning. >> good morning. i think 12 of the 20 had sequential declines going into january. eight of those were worse than the month before. is this a weather pattern or is the housing recovery really taking a breather? >> well, yeah. the weather was bad this year, but even just normal weather winter or spring is normally a weak time for the housing market. on a seasonally adjusted basis it's going up 0.8 of 1% nationally. that's good. i mean, there would be something, like, 10% a year. but that's a little bit less, so you're right, it is slowing gradually in the data that we have. less than the 13% that we just saw. >> right. what do you think's driving that? >> i don't -- you know, i've been doing surveys of consumers

and following the data. the 13.2% increase in the 20 city index really isn't driven by individual home buyers and their excitement. home buyers don't expect much. the new york fed survey of home buyers one year expectations has it up only 4%. that's not exciting. so, i think maybe investors played a big role in this -- in the run-up we've seen in the last year. >> robert, jim cramer. i saw 12 cities declined in january. chicago decreasing 1.2%. that's pretty big, isn't it, to decrease 1.2%? >> yeah. but that's an outlier. i think most cities have gone up in seasonally adjusted terms. and so that's what i would look, looking for the overall weakness of the market. it's weakening.

you know, i worry that it's going to weaken more because i think investors are in the market when they know that there's momentum in home prices more than in stock prices and they were observing these big price increases and it's enticing. now, you know, it may not last and these investors may be gone. >> robert, that's a great point because we know there are a lot of investors who said, do you know what, new paradigm, buy the house, rent it out. they always feel so confident when they say that. could their confidence be misplaced? >> right. i think there's -- there's probably a need to convert owner occupied to rental because that seems to be a trend. but the problem is that it's not typically a great business to do that unless you can get a good price on the house because it's expensive to convert and to maintain disbursed family homes so that's putting just a kind of general drag on the market. you know, investors will be in it, but they're only going to be

in it when they can get a good price. >> we have heard some anecdotal pieces of evidence regarding inventory in the likes of phoenix and the sunbelt. if this investor-dominated trend is coming to an end, robert, are we going to feel it first in states like arizona? >> well, it's interesting that you pick, you know, arizona, phoenix has been slowing down. it was kind of -- one of the -- one of the biggest price increases. also not too far away las vegas is still going gangbusters. i think there's some speculative excitement driving those cities and we've seen it fade a little bit in phoenix. we might see it fade in vegas as well. >> yeah. finally, robert, i had one question on stocks. i don't know if you saw "the journal" this week took a crack at your schiller p/e and in their words stocks are undenbly expensive. where is your head on that right now? >> i think stocks are undenbly expensive but i'm still in the

market because i think that even at the present cape, this is my cyclic level, they do all right even at that level. i'm not -- i'm not pulling out of the market. >> interesting take. >> yeah. >> always got to take your temperature on that. and thanks for the guidance on case-shiller this month. >> great. >> i've been spending a lot of time looking at zillow and he indicates that things remain plus 4% and he uses different data. some people like shiller's data better, but i feel the value of usual home is not going down and therefore it's worth investing in your home which is why a lot of the retailers like a williams-sonoma did so well, so i don't want to lose the thesis. i don't think we're losing the thee sills that it's still a good place to invest in. >> as he said as the home depot

spring season begins. >> one thing i don't like about this as someone who is a gardner. all we can talk about is the ground going to be too cold. 21 degrees this morning. >> still frozen two inches below. >> i don't want to start -- when you start planting in the third week of may. you miss a lot of the season. >> when we come back we'll get cramer's "mad dash" and count down to the opening bell here. futures are positive. a lot more "squawk on the street" live from post nine in a moment. salesperson #1: the real deal's the passat tdi clean diesel gets up to 795 highway miles per tank. salesperson #2: actually, we're throwing in a $1,000 fuel reward card. we've never done that. that's why there's never been a better time to buy a passat tdi clean diesel. husband: so it's like two deals in one? avo: during the salesperson #2: first ever exactly. volkswagen tdi clean diesel event, get a great deal on a passat tdi, that gets up to 795 highway miles per tank. and get a $1000 dollar fuel reward card. it's like two deals in one. hurry in and get a $1,000 fuel reward card and 0.9% apr for 60 months on tdi models. and you'll see just how much it has to offer,

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just minutes before the bell let's get cramer's "mad dash" before the market open. watching walgreens here, jim. >> people that want to believe the market can stabilize will take heart on walgreens. they missed the numbers, however, they gave a very optimistic read for next year with the alliance boots deal, stock is looking up. that's very positive because we know if the market's really rolling over, forget next year, they missed the number. i like that. >> comps up four plus and saying the impact of generic drugs will ease later on in the year. >> and it's interesting that perigo goes up and it's the generic drug company. look, i think this is a great company. i think cvs is great and i think rite aid is great. >> csx. >> you mentioned the transports and the transports and the dow didn't confirm. of the ones that didn't confirm in the transports it was csx because of coal. this piece says that coal has bottomed. it's troughed.

michael word said the same thing to me when he was on "mad money." this is one cheap rail versus union pacific and norfolk southern. i like it. >> so, you don't think coal is necessarily a liability for some of the rails here? >> i think that what happened is it gets so low that it stops being a factor. norfolk southern went from the high 60s, low 70s to the 90s because basically they said, listen, intermodal is so strong. csx has great intermodal, too. these are terrific companies. i think they go higher. >> that's a good one to watch. we'll see how it plays out. the markets are hoping to rebound after a pretty rough monday. the opening bell just minutes away. s away. bulldog: you know, not all heroes wear capes. bulldog: you know, some wear fur. and mattress discounters good deed dogs is here to help them. meet yara. she helps veterans like marv stay independent.

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♪ ♪ [ 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. you're watching cnbc "squawk on the street" live from the financial capital of the world. we'll get the opening bell here in just under two minutes. a lot to watch. we're going to get some confidence numbers later on this morning, some new home sales. already got case-shiller under our belt and then we've talked about some of the new ipos coming to market, box, and king today, stern a.g. with a note saying candy crush it's a big game, jim. 20% below peak booking levels.

they've got to diversify if this whole thing's going to work. >> right. i think people will say wait a second, is this the second coming of zenga. it's doing a lot of good, zynga had peaked before it came public. i'm not against people being in this stock if they get some. i'm just not going to slam it. there's too much good here. too much good. >> you made that point yesterday. carnival is out. i believe they had a flat versus an expected loss and later on today the ntsb is going to hold two days of panels regarding safety into cruise lines and cruises around the world. >> and the bookings weren't so hot. this is a very good company but in the end they've missed a couple. it does seem to come back all the time, though. >> well, "costa concordia" people thought pricing and the surge season would not go well, they managed to hang on at least to basic prices. >> great point. this is a business where people feel it's one of the cnbc 25. we actually talk about micky arison.

people think this issen affordable vacation. it remains that. travel still very strong in this country. i reiterated priceline last night as one to watch on "mad money." that's a driven company, too. >> dote eutsche on lulu. they take their price target to $65 to $55. >> right ahead of the quarter recorded. and when i see those kinds of cuts. i get very worried because i say, why not just wait until tomorrow? i mean, why go in ahead of that? obviously they think that they're making a very big call. so, it makes me very gun-shy. it makes me gun-shy to own the stock. i'm looking at my candy numbers and i want to remind people the king digital it does -- i mean, it sells at 13 times earnings if it comes in the range of 21 to 24 and zynga just to compare sold at five times sales 58 times earnings, before you say, hey, listen, it's all junk. i'm not defending a lot of these ipos but i understand that

that's priced pretty reasonably. is that all right? >> you've been consistent on that. we'll get the opening bell in just about ten seconds here. down here at the exchange take a look at who is ringing the bell. tpg specialty lending spell brayting its recent ipo and over at the nasdaq new jersey seeds a nonprofit providing educational opportunities to highly motivated low-income students. >>fantastic. >> we haven't mentioned disney. >> i was just going there. >> all right, you know, we worked together a long time now and i think we nail it. it's interesting, what is this about, the disney acquisition, carl, is about youtube. it's about putting some things on a short video. whenever i speak with younger people who are in film, this is the explosive area. i think bob iger did something good here. >> unbelievable, buying maker studios for $500 million which is essentially a channel that works on youtube as jim says. it's their biggest acquisition

since lucas film. 380 million subs. >> isn't that amazing? >> and the number of views per month 5.5 billion. >> this to me back to something that i cannot believe others didn't buy ahead. i mean, this is just a great acquisition. they got some sort of earnings out here. once again this is a company that continues to surprise. congratulations, by the way, to ben sherwood. >> congratulations to ben sherwood. >> replacing ann sweeney and done great things at abc news. you can't take it away. >> i know that we are in fierce warfare and we want to win and they want to win and you get guys that you like and you got to mention them. >> packard almost up 3% on a goldman call. a truck rebound. >> there's a big truck rebound coming. and now my charitable trust owns cummins. this has been a laggard. paccar we recommended not that long ago. this is a very big cycle it's

called class eight, heavy duty trucks they've been in a bit of a bear market. it was a big call. don't buy navistar because there's other research that says be careful, navistar, ubs says they are losing share. i like paccar it's a great american company. >> dow's up 108 points here. breadth is overwhelmingly positive here. >> europe, i guess people kept waiting for europe to look better off the g7. agatha christie. >> or one of the great lines on twitter was i could have had a v-8. >> i had bombardier on and they own lear jets. and i see no one focusing on it. it is kind of amazing when you think about it. i got up this morning, wow, there goes russia. >> we had plosser on "squawk"

and we'll hear sound from him later on. >> some say it's a plosser rally. >> and williams, too, we'll talk to liesman in a moment. williams in "the washington post" as some said trying to clean up yellen's comments about the six months from last week. >> well, that is a very big thing because there was just so many reports in the background that short rates are going to spike. those of us who are actually in cash because i'm not -- i don't own anything. i looked at that and said holy cow, maybe i can get a cd for three. those of us who are savers and not allowed to invest in anything, we were waiting for this and they take that away, it was a rather remarkable thing. i was far more attuned, this is personal. i personally want the rates to go higher because i don't make anything. 0.88 on my cds. >> and you are speaking for a large part of the country, too. let's get over to the aforementioned steve liesman at hq and talk about what plosser did say this morning, hey, steve. >> carl, a little clarification

from charles plosser who called to clarify that his funds rate forecast for 2015 is actually 3% and for 2016 eit is 4%. the highest on the committee for '15 and the second highest for 2016. i actually misspoke on the air this morning, saying he was two and change for 2015 and 3% for 2016 but he called to clarify to make sure where he is on the policy not necessarily where he thinks the fed will be at that time. 3% for 2015 and 4% in 2016. at 10:00 we'll talk more about the comments on charles plosser on "squawk box" this morning. back to you. >> thanks so much, steve, for the clarification. we'll see if the market listens as much as it did to the initial comments. >> we had a big rally ahead of yellen and it's been kind of soft. remember, i think the softness is related to supply. you can overwhelm a bull market.

>> with new supply. >> yeah, you can overwhelm it. because that's what happened in 2000. we just kept getting all the secondary supply. >> sure. >> you look at some of the stocks you hit up the stories it's insider selling, insider selling, insider selling. why should i hold on if the insiders are bailing. and remember, this is all new tech. old tech there's not a lot of sellers. those stocks have been creeping up. banks not a lot of sellers and those stocks have done quite well. i see pockets of things that are acting terrifically and then there's stocks that sell on -- as a multiple to sales and they would rather be in box, drop box than they would be to be in splunk and drop box. drop box is struggling and it's only up a buck, but it has to rally. watch salesforce.com and that was at $67 when they reported widely perceived be a great quarter and it is at $57. those are your two key names.

the key to this market is see stabilization in those two days. >> mccormick is going to get some love fiscal first quarter 62 cents beats by a penny as we continue to see more pricing power in food, jim. >> you know, this imcompany's remarkable. baltimore based company and quietly does its thing. you know, if you cook at home, i cooked this weekend, i was putting some mccormick spice on, i have a baltimore ravens commemorative mccormick spice can and i just think this is a remarable and underrated company. people like to eat at home. this is the eat-at-home play. they've got a terrific actually a private label, too. this company is the spice company and they are fabulous. congratulations to them. i just think keep doing the right thing for shareholders. >> and speaking of earnings like theirs, we're right around the corner, you know, analysts jim for the earnings season for q-1 are looking at 0.3 percent

growth. the quarter is not expected to be spectacular by any mean s. >> we better do better than that. i don't want to see companies do business in russia cut numbers because of russia. obviously season kick off with alcoa, going from 8 to $12. i kind of feel that's too low, that that estimate's too low. there's not been a lot of raw costs for guacamole and beef and a little soy. i'm a little more constructive about that part of the market and i'm not constructive about the multiple to sales stocks. >> this time next week we'll be watching major league baseball. that's not bad news. got your phillies ready? >> i don't know, man. i'm struggling flyers lost. i'm desperate when i'm following hockey. >> anything but the sixers, how about that? >> well, sanchez. >> sanchez, too. dow's up 110. let's get to bob pisani on the floor. hey, bob. >> hey, guys. we got a great start to the day

here all of the former groups that have been hit hard in the last few days are up today. look at the major groups up. biotech had a very rough march so far. that's up. emerging markets are up. that's the eem. xxd, that's the semiconductor etf that's a market leader. been hit hard the last few days that's up and the gold miner, gdx, the last one, that's an etf as well, another market leader doing well so far today here. it's very interesting to see the ipo rush generating lots of sarcasm. you were talking about box, mark cuban had an interesting comment as soon as the box terms were announced mr. cuban came out and said i wish box the best but i would combust if eight years in i was responsible for $169 million losses less revenues and he's referring to the fact that they reported $168 million in losses and, of course, they're doing that because they spent an awful lot of money to get new customers. there are plenty of start-ups

that have been doing it for years and years, you were talking about workday, they did it for the longest time and the argument was we have to spend money because we get new customers and the subscriptions stay with us for many years. that's been the argument for years for companies, workday, salesforce, they spend aggressively. people have been buying into it and there's a point maybe they won't. but at least it's been called into question. we've been seen some weakness in companies. look at some of these names and they're not always in the same businesses but they are bound together by cloud, web hosting. veeva is down, netsuite, workday and rackspace and salesforce.com. we're in the milled of the ipos for cloud-based companies. 2-you is coming up in the next couple of days.

and there's a mobile network platform for businesses cloud based and that company is coming as well. we're in the middle of a big rush for cloud-based ipos and the weakness is telling and it's being discussed on the street. the other group i want to talk about is china-based internets. the slowing in china is causing a little bit of concerns because these are the companies that have the fastest growth. these are the big momentum companies that are in china. so far in march your youku and renren and sb.com are underperforming and the third market group having an ugly march are the home builders. they were the early leaders but there's been a lot of concern about the spring buying season. a number of companies have reported orders down year over year, not all of them but a lot of them and the rising rates haven't helped as well. they tend to do well from november to april and usually start having a problem right about now.

so, maybe this is not unusual because they have had a run-up. i just want to point out they're very much to the downside. the dow jones industrial average up 100 points. back to you. >> thanks so much, bob pisani, on the floor. let's get to the bond completes and rick santelli from the cme group in chicago. welcome back, rick. >> thanks, buddy. anybody continuing to try to answer all the questions about the ultimate direction of interest rates is looking at yield curves. if you look at a one-day and specifically a two-day of tens, you can see yesterday we reached up towards 278. today we're elevated a bit. but we're still not really breaking through. and if we look at the chart from january we can clearly see that there's a lot of activity around the 271 to 277 area. but that's where all the question marks end. the real issue is that the midpart of the curve and even the short maturities, threes, fives, after they moved up in yield, down in price, after the

fed statement really haven't backed off. so, as you look at a fives to tens spread, you can see that it's basically the tightest it's been in ten months. but here's the one to really watch. look at fives to 30s. close to an eight-year, yes, eight-year flat, so we want to continue to monitor that. let's look overseas for a minute. let's look at bund yields for two days. they seem to be moving in a different direction, indeed they are. that part of the curve in europe not going anywhere quickly, that's why the difference between the two is virtually at the widest it's been in eight years favor of the u.s. side. the last chart is a year-to-date of the dollar index. yes, we are in positive territory. yes, it seems to be feeding off of the flattening of the yield curve and rising short rates but it certainly isn't breaking any records to the upside. carl, back to you. >> all right, rick, we'll talk to you in a little while. rick santelli in chicago. when we come back a big

treat, wait until you hear what kevin o'leary of "shark tank" has to say when he joins us at post nine. dow is up 106 and the s&p up to 1868. >> whoa. >> back in a minute. inute. opportunities aren't always obvious. sometimes they just drop in. inute. 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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take a look at the dow 30 we're up about 120. pretty good breadth led by a healthy moving caterpillar up two percent plus which is tied for the best-performing dow component of the year. >> without any good earnings just shows you, you know, a lot of optimism. microsoft just going up. just on a presentation. lots of people hopeful here. >> right. in the meantime got some news on google. it is a case of high fashion meeting high tech. lexotica has signed a deal with google to manufacture and design glasses containing google glass technology, known for its ray ban and oakley eyewear. we knew this would be a premium product of some sort but the brand association is upscale. >> they are ramping. google was up ten. it's only up eight.

watch google it's a charitable trust name. google has to gain back what it was losing. it was done hideous 25 yesterday. watch that, it will be another good tell of what's happening in the market. >> the product not material to much given the size of the company, but as a brand messaging tool, it is watched closely the success of this. >> yes, it is. and don't forget the disney acquisition is something that says, listen, you can monetize this. the group has been horrendous and you got to see it stabilize. i'm going to things even the hope is look at wall green. missed a number, up three. look at mccormick, okay number, up big. people want to own low multiple stock. they are willing to pay anything for low mo, they feel they will pay up a multiple point. >> yes, understood. meantime, blackberry tried to sell itself to china's lenovo but was warned by the canadian government that it would block such a deal according to

canadian broadcaster cbc and blackberry blocked the sale after saying an investment by china or russia would be opposed. last thing they needed. >> the canadians are very protective and there aren't many large companies that are headquartered there that they want to lose that. the canadian government very pro-canadian business. whether it be rejection of the accords or protective of their companies. we could learn a lot from the canadian government how they treat businesses. >> walt mossburg will be on to talk about the new htc, in terms of the phone business as we get closer and closer to an iphone 6 in the fall or whatever, it's going to get even more cutthroat. >> yes. but the hand held is behind a lot of these rallies. this is all device related if you got -- if you're on the cell phone it's working, if you're on the desktop, it's not. >> meantime, i don't know if you saw morgan stanley yesterday had a list of 44 companies that they

think will get at least one tender offer in the next 12 months. on the list jcpenney, american eagle, hain, jbill, i think brocade and celgene and wendy's. >> i read the list and said it would be manna from heaven. i'm very skeptical of this because one of the things that we haven't seen is a lot of takeovers. this presumes a wave and yet i think things are quite uncertain and a lot of people feel stocks have moved up too much. i was heartened by it but i also don't think it's necessarily good. >> the point is that corporate america sits on a trillion dollars in cash. >> they do. and that's one of the reasons why the s&p stocks are doing so well. but i think it's the biotech and the workdays i don't want to pick on workday it's a fabulous company. but software as a service and cloud and biotech, if we get a stopping of the ipos that group

will come back. right now it's allsome and it's all about mccormick and walgreens and caterpillar. >> a good trio to watch today especially. we'll get "stop tradintradi with jim in a moment. th jim in . well, did you know the ancient pyramids were actually a mistake? uh-oh. geico. fifteen minutes could save you fifteen percent or more on car insurance. what'swithout the thinking capitathat makes it real?? what's a vision without the expertise to execute it... and the financing to make it grow?

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♪ you don't pull the mask off the old lone ranger and you don't mess around with jim ♪ yeah, you don't mess around with jim especially when it's time for "stop trading." >> we have an interesting opportunity a stock called g-3 this is an apparel company and it's down hideously. when you go through the call as i have this morning what they are really saying some of this is an acquisition of bass shoes. i think you buy g-iii, remember, tonight i've got pfh they are a partner on calvin klein. i have manny chirico. it's down too much. >> slb. >> shchlumberger, everybody who talks positively it's working, schlumberger saying, listen, business is good. unqualified, that's good for halliburton and the whole group.

schlumberger is obviously best of breed. this is a true breakout. >> oil is getting so much attention as the cleanup continues in galveston, jim. >> oh, geez. >> they're saying that fortunately a lot of it appears to be going into the gulf where the damage would be lessened than it would be if it stayed in the bay but as you said yesterday it's great if you can figure out a way to move it around the country whether it's a pipeline, a truck, a rail or a boat. >> right. i happen to feel it's aspirat n aspirational. this is a circle back to another one of these areas where there is pipe because it's old. but where there isn't pipe when you're in the balkan it's train, it's truck. i think that, you know, barge, all these are not as good as pipe as much as people the environmentalists do hate pipe. >> finally with chirico might gave you another good read on jcp which is in the news today, paying more up for mike allman. >> i think mike is turning it around ever so slowly. i'm not saying you need to pile

into this. but the company was left for dead and i think they are starting to do a lot of right things. he was a good merchant, but you got to watch the others to be sure. you got to watch kohl's, for instance. you got to see target. they all have to move higher in order to take jcpenney up. target and kohl's have been stalled. kohl's making some management changes. >> and finally, jim, up 113, i know you've been cautious here but is there a level at which your confidence ask renewed if the s&p, if gilead or whatever can hold. >> i think you need to see gilead. you need to see google, okay, these have to hold. you need to see salesforce.com to hold and go higher and if those -- gilead, that is very encouraging. gilead led us down on the nasdaq. >> yeah. >> honestly, gilead was the precipitant, if it comes back i'm more sanguine. i have to tell you the s&p names are really good.

i don't want a 2000 scenario where the s&p does well and the nasdaq does poorly. you don't need to watch a lot of companies to make a judgment. i think if you watch salesforce, if you watch google, you woch workday, watch tesla, watch solarcity those have to stabilize. we're not talking about apple. it's a low multiple and apple is creeping up. >> you are not making a judgment whether they will stabilize. >> i'm in watch mode. the reason i'm in watch mode is because so many people have lost so much money in these stocks. i was going through my twitter feed and they are hanging on by a thread and i don't want to antagonize. >> go back to the rig where you are safe. >> geez, when you blast a stock and you say it is speculative, they know where you live. and you couldn't get me on the rig 13 miles offshore. now i'm kind of around. >> we'll see you tonight on "mad money." >> thank you, buddy. still to come breaking news on consumer confidence numbers

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welcome back. we're waiting for some breaking news in just a few seconds as we await conference board confidence numbers and new home sales. case-shiller did see some continued deterioration in housing as robert shiller told us in the last hour but dow is up triple digits. >> he was worried it may fall further. >> let's get to rick with some of the data. rick? >> here we go a trifecta of data starting out with march read on consumer confidence from the confidence board 82.3. 82.3. why is that important? because, boy, that's going to take us back quite a ways since the last time we saw something that high. that's the best level since january of '08. if we look at richmond fed that's next in line that's also march read. that's minus seven. now, that's a big miss. we're looking for up five. last time we were at minus seven, well, that would take us back to july when we were minus 11. and the last look is for a february read on new home sales.

440,000 seasonally adjusted annualized units, very close to expectations. if we look at last month it was revised from 468,000 to 455,000. so, this read represents a minus 3.3, 440 matches up to the weakness level just since december when we were at 427,000. sara, back to you. >> thank you very much, rick. we want to get more insight on those housing numbers just out new home sales let's go to diaae olick in washington. >> it's interesting that january numbers which had been very high were revised down. we had that 468k revised down to 455 so what we thought was a 10% jump month to month in january obviously was not, so this one is even lower than xpectedexpec. they are slow with the commerce data today but we've been listing to the builders say that they've been raising prices

because they have problems with land, supplies, labor, they need to keep prices higher. they also say that that's who's buying homes right now is the move-up buyer, the more expensive home buyer because the first-time buyer has fallen completely out of this market. always remember these are contracts signed in february not closings. existing home sales numbers are closing. these were folks out in february in the snow buying homes. so, it's not a terrible number. it's not a fantastic number. it's right along expectations. but, again, starts and sales are running well below demand. we should be up over 1 million homes right now. we're still at this 440,000 home sales annualized. demand makes it should be much higher. back to you guys. >> okay, diana, very much for that. let's dig deeper into the figures we're getting steve liesman joins us from back at hq. let's focus on the clear good news here, steve. consumer confidence coming

through at 82.3. that's a very high figure. >> yeah. it's a decent number. >> yes. >> and i think it speaks well maybe getting beyond some of the weather-related downturn we have and the hope i think for people like diana olick is that they eventually go and with all that confidence, they go and buy homes. we just can't tell. i thought it was interesting the way diana said people who were out looking for homes in february as if those had to be the craziest of people that were out there i think who were out there looking for homes given what the weather was, so giving that a pass and waiting to see what happens when the critical as diana has said several times the critical spring season begins, i don't like the richmond fed but you could argue it was a weather related number. april or may until we see the data. wanted to talk about what charles plosser the philly fed talked about this morning. he called in and said it was 3% his funds rate forecast in 2014 and 4% in 2016 so he's the hawk that we thought he was going to be. let's listen to what else he

said about rates that were out there. >> i don't think the fed changed its position. i think it tried to say very explicitly in its statement we believe the forward guidance or the expectations have not changed as far as we're concerned. i think what you need to do is pay attention to what she said after her reference to the six months which was it was going to be data dependent. it would depend on the outlook for inflation and the improvements in the labor market and those were the things that would dictate when to raise rates. >> near term it's a dovish comment from charles plosser, longer term he went on to say, hey, we may be forced by the market be higher than we think right now but near term making the point that janet yellen did not mean to change the fed's guidance on rates. simon? >> it is inevitable that they're going to err on the side of caution if they're in an environment where they are raying rates. what they say in public is always going to be slightly more dovish because of the nature of the inflection than the core

conversation that's being had behind closed doors and i think for many people, you know, she let the cat out of the bag. and it's changed the conversation. it's the inflection point, isn't it, steve, because you're beginning to talk quite specifically about the date that not only tapering is over but that interest rates rise and whether the economy is strong enough for that. >> with all due respect, i think the fed would reject there's a cat or a bag here, that there's some reason for the fed to not be transparent about what it believes to be its -- the path or the average path of the funds rate. i think the fed had been comfortable with this notion that was in the market. it showed up in the average of the cnbc fed survey that there would be a third quarter rough-rise in the funds rate. i think the fed was comfortable with that. i think it went out of its way to say that we're not changing our guidance here so you shouldn't change that outlook there. so, i'm not sure there's a cat or a bag here to keep anything from the market, simon. >> for me, steve, the most important thing that you said

and all of the fed members dovish or hawkish has been reiterating this, that is they are data depen dent. it seems like 3% gdp growth 2014 that's pretty much the consensus estimate and it's pretty solid. is it good enough to keep the fed on track with that interest rate increase in 2015? >> you know, i think so. but i think they are kind of feeling their way and that's maybe where, you know, simon gets concerned is that maybe there's something they know. i don't think they know and i think we're in a new guidance regime here that we don't have that 6 1/2 percent threshold so what does it replace it with? i think it replaces it with comments from charles plosser and 16 other comments out there what the forecast is and what the trend and glide path will be for 2014. >> that's the important point. deutsche bank said we live very much in the moment every month we're looking at the data. they're central bankers and they have to look at what happens over time and at some point this

economy is going to slow down and they need to have exited and normalized sufficiently that they're able to cut rates and if necessary embark on qe again. this economy has grown for three years and for how many years will it continue to grow and at what point should they be talking about interest rate cuts. >> i didn't wake up this morning and say give simon hobbs a hard time. >> it's important to -- >> i wake up with that. >> you wake up and say that. but my point is the fed thinks at some point this economy is going to speed up, so that's really the abiding concern at the federal reserve right now, sifemen a e simon, and it's a fascinating discussion. what they are concerned about is you have a speed-up in the economy and that forces their hands on the rates is and that is the biggest risk for the average fed member than the economy slows down. >> have a listen. i want to play one of the sound bite that resonated with me when charlie plosser did talk about when the time would come. have a listen. >> sure. >> if the market gets ahead of

us i've often said financial markets aren't always patient and if they get ahead of us, then we may be faced with a situation we'll have to raise rates faster than we otherwise would have chosen to do. and that's one of the great unknowns about this whole exit strategy. >> sieve, the reason this one resonated with me is because data dependent and market dependent. this is a risk here that the market's going to get ahead of the fed and the fed's going to be behind the curve and they'll have to move sooner. >> you just heard what made charles plosser a hawk when he wakes up in the morning his biggest concern is market gets ahead of it and they have to raise rates faster. there are other people on the committee the opposite of charles plosser saying, do you know what, i'm concerned we'll go too fast and the economy will not really move as fast as i hope it's going to move and we'll get ahead of the economy on this. so, there's an equal and opposite offset there. that's charles' considered point of view and i think it's an interesting one, however, i don't think it's the prevail one

on the committee, the one you would follow to figure out most closely where the fed will be a year from now. >> all right, well, that's why it will be interesting to monitor all of these fed comments. >> absolutely. >> steve liesman always good to talk it out with you. >> my pleasure. more pleasure on general motors, a new filing request in texas for a stop driving alert for all vehicles impacted by the gm recall. our phil lebeau following the saga with us on more what we've learned now. new detail every day. >> this filing was made in federal court in southern texas. it will be interesting to see whether or not a judge issues some kind of a ruling relatively quickly or if this drags on for a while. the texas attorney said gm should issue a stop driving alert for the recalled cars. he's filed the motion in the federal court seeking an immediate injunction. gm said the recalled cars should be driven only with the key ring but the attorney says look at the recall letter from general motors and here's a quote from the recall letter this is important to pay attention to.

the letter says there's a risk under certain conditions that your ig anything switch may move out of the run position resulting in a partial loss of electrical power and turn toing off the engine. this risk increases if your key ring is carrying added weight such as more keys or a key fob or your vehicle experiences rough road conditions or other jarring or impact related events. we talked to the attorney in texas who knows when you might cross bumpy roads and that might result in a condition where the engine is shut off. mary barra has said the cars are safe to drive. we reached out to general motors this morning and they say they stand by what mary barra has said in the past, just last week he told reporters that. she'll be testifying on capitol about the recalls and that will happen next week as you take a look at general motors trading in the $34, $35 range. in talking with the attorney, we're hoping to have him on a little bit later today on cnbc

to talk a little bit more about whether or not it is the smartest move for general motors to the people that own the 1.6 million cars stop driving. developing story. >> anybody who is driving in new york or new jersey have to stop driving because the roads are in such a bad state. manhattan you are bouncing around all over the place this year in the wake of the winter. >> and his concern is not to be playing off the pothole thing, you hit a rough ride, a rough patch, who knows how your car might respond. that's his contention which is why he thinks gm should tell people to stop driving the cars. >> all right, a lot to watch on that story, phil lebeau in chicago. the ipo rush gathering some steam. there are more than ten this week. game maker king, of course, getting a lot of the attention. box just announce nounsed its plans. should we be worried about a bubble in all this new supply. k you'll need when you retire? then we gave each person a ribbon to show how many years that amount might last. i was trying to, like, pull it a little further. [ woman ] got me to 70 years old.

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welcome back to "squawk on the street." check out shares of u.s. steel, goldman sachs is repeating a buy rating on it and ak steel say'ing the market hasn't fully priced in near-term positive fundamentals. among them scrap prices appeared to have bottomed and the flat rolled industry is more consolidated and the bad weather is over. u.s. steel shares up off their session highs about 2% to the upside. back to you. >> all right, dominick chu. cloud storage company box has filed for an ipo. ceo aaron levie joined us

earlier this month and this is what he had to say on the company's growth. >> we're very focused on getting to every business in the world with our software. we want to change how all companies work with their information and we're going to be growing as aggressively as we can to make that possible. >> box, of course, is the latest in a swarm of ipos. there are more than ten expected this week alone including that highly anticipated king which is making some investors worry about a bubble but our next guest says what bubble? david melo is the president of ipofinancial.com and he joins us live on post nine. should we be worried? >> you the bubble mentality if you really look at it, a bubble is about ready to pop at any point, we're in a balloon at this point and when an underwriter makes a misstep and they get too aggressive with the valuations and the investors say no, not with me, not this time again, there's going to be an immediate change. you'll get revaluations that

will come down dramatically like they have been doing with some of the drug stocks. >> and so far they haven't fallen into that. >> they are not because they think everything is wonderful. anybody who has gotten into a high situation a 16 that's gone up 100, 150% they've had time to reflect on it and say i've had enough and i'm getting out. >> one reason some are pointing to a bubble and are worried, let's talk about box. everybody is pointing about the fact that, yes, strong revenue growth but also strong expenses that are way outpacing the revenues at least in terms of the dollar amount. you can find something wrong and that's in sharp contrast to the euphoria that you see, the 20% jumps that we see at the open of these stocks. >> it's basically stick the needle in the vein ipo craziness similar to what we in the 2000s. not to say that this kind of formula can't work out at some point but they are really pushing the envelope saying everybody will follow it and say we're in line.

>> what about king? how do you feel about the king ipo? maker, of course, of candy crush. it's being valued we believe at 2.9 times projected sales. is it another zynga potentially? >> i think sales probably has a lot of blank spots in between those letters only because this could end up being a one-trick pony. i don't know that they're going to be able to catch lightning in a bottle twice, simon, and quite frankly anybody that's going to get it is going to have to have one eye on the exit door. >> for you to say that and i think that's what a lot of people are concerned about, still it will come to market at a valuation of 7 billion to $8 billion. >> right. >> how do you square that? >> i can't square it. i can't give you any reconciliation as to why it makes sense other than when you are out socially with other people and you ask the -- not the millennials, people say what level are you at, people know about the candy crush. >> you are old enough that nothing lasts forever. >> i don't know.

i have to get back to you on that. >> you're still pretty young. you think one area to watch is not just the new issue but the secondary as well. how many have we seen so far? >> so far we've had 53 ipos and 236 secondaries. last night alone from 4:00 to 5:30 we had nine filings that came out. so, that's the story that's not being told and that's the real growth story of america. not about making these instant billionaires that you'll see on box and king and what have you, this is where people are trying to continually deleverage and it's a statement about how the market is not overvalued because most of the time they're using the proceeds to buy assets. >> can you give us an idea, kind of a qualitative assessment of how big these chunks are shares are relative to the market? we know that the market has borrowed heavily. the margin debt is very high. are people having to make way and sell stuff in advance in order to buy what might be the next hot thing? in other words i'm asking you really did biotech sell off this week potentially because people

are making room for king or alibaba in two weeks? >> i'm glad you tied it in with the biotech. biotech is getting very long in the tooth at this point and everybody who is a biotech maniac understands that the pipeline for the major drug companies is really starting to get crimped on. so, what is happening is the biotech people say we're going to buy it because we're going to wait at some point for the majors to come in and buy them. i don't know when that's going to be but at some point it's, like, i've had enough. please don't press that formula anymore. i don't think they are clearing the way. >> that etf down 8% in two days. boy, momentum. >> that's it. definitely. >> thanks, david. we'll see you soon. >> pleasure, thank you. in the meantime new details surfacing in the general motors recall crisis. it's all a big test, of course, for the new ceo mary barra. how should she be handling this problem now? marcus limonious will join us at post nine to discuss that after this short break. rt break.

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the guy told us what he wanted to focus on. where are the storyboards, the sketches or something? >> i'm not a drawer. i can't draw. >> i know you're not an artist and you're not going to go out there bending the plastic or whatever, but you literally have nothing. you didn't reach out to me one time about that. you didn't say to me, man, i'm stuck. i don't know what to do here. i don't even know what to say. i haven't asked you for anything. i just don't think you want to do it. >> if you can come up with a good idea, i would love to do it. >> why do i have to come up with

the idea? >> because you're part of the company. >> i'm a minority shareholder just paid off your debt. honestly, i just feel that you said [ bleep ] you, i'm just not going to do it. >> ouch. that was just a taste of tonight's episode of "the profit" which multimillionaire marcus lemonis tries to help struggling businesses and turn them around. here to talk about the episode and the struggles at gm another troubled business is marcus lemonis himself. i would not be sitting the other side of the conversation. >> if i wrote you a million dollar check and brought you to nascar and all these things, you would be back at the office working try to figure it out. and once people get the money they get a little bit of amnesia and they don't want to work. >> did you motivate him? >> i motivated him. i don't know that it ended up working. >> i want to ask you about general motors. the headlines every single day. if you look at "the new york times" and "the wall street

journal," more on how much they knew when, how they misled people. it's going from bad to worse. is it a crisis of management or crisis of brand? >> yes to both. i will tell you that i think mary's doing a great job of getting in front of it. most of the people that were involved back in 2004 aren't there anymore. and the real question for me is, are they going to have to take a noncash charge and if they do, how does this affect the bankruptcy filing that they made that said they were extinguished from issues before 2009. if i'm an investor or shareholder of the business, i want people to be taken care of, but do i want my money leaking out of the system? >> when you have a ceo or manager that's having to respond to past mistakes, right? in this case before her tenure. how do you grade them? do you need to be tough on them even though they didn't originate the problem? >> i think you have to be tough on them about how they solve the issue not how they dealt with it in the past but how they solve it going forward. she's putting together a plan that looks very open book to me.

it looks very transparent and they're going to get punished, maybe not in their pocketbook but are the consumers going to show up at the gm lots for the next 12 to 15 months? four years ago we had a toyota brake issue. i don't know if anybody remembers it. >> they just had to pay one of the highest fines ever. . >> was that for brakes or acceleration? >> thank you. but we're still selling toyotas today, so the brand can recover and so if she can take page out of that book, will it recover. the stock sill sitting in the middle of their 52-week level. >> we were talking during the commercial break about the thousands of applications for people that want to be on the next season of "the profit" do people like mary barra call you and say, unofficially, can we go out to dinner? >> not mary, but a lot of bankers want prospectuses on medium to small businesses. what's happening to the consumer and employee.

small businesses gives us an insight. >> good to get your thoughts on the leadership crisis really that gm is in. marcus lemonis. you got a little taste of "the profit." >> made of money. >> it's your christmas gift. >> like the iron throne of "the profit." we do have some breaking news on the raja gupta days. >> the former head of mckenzie, former board member of goldman sachs convicted in 2012 for insider trading. a federal appeals panel has just upheld that conviction. gupta was speen sentenced to tws in prison pending appeal. the appeal has been denied. he was challenging the wiretap conversations of raj rataratman,

and the appeals panel upholding the convictd of raj gupta. straight ahead on "squawk on the street," the battle of the million dollar homes. find out which one of these houses is a better buy when we come back. how could a luminouser ] protein in jellyfish, impact life expectancy in the u.s., real estate in hong kong, and the optics industry in germany? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. with investment information, risks, fees and expenses are we still on for tomorrow? tomorrow. tomorrow is full of promise. we can come back tomorrrow. and we promise to keep it that way. csx. how tomorrow moves. what a day. can't wait til tomorrow.

some of the stories we're talking about at 7:30 on the west coast and 10:30 on wall street. the consumer confidence up four points in march to 82.3. and new home sales down 3.3% in february to 40,000 units the lowest level since september of last year and mccormick is the biggest gainer on the s&p up 5%, the spice maker posted better tharn expected quarterly results. we've got pretty solid rally going on wall street one hour into trading. the dow jones industrial average up 83 points just off the highs of the session. the s&p and nasdaq also rising. nasdaq in particular a rebound after the beaten-down biotechnology shares. art cashin of ubs joins us on the floor. the chatter, biotechs rebounding and stocks shaking off the last

few days of losses. what are you hearing? >> so far, sara, it's pretty much a relief rally. traders on the floor look at odd things. the s&p and nasdaq both spiked on the opening but they failed to get as high as the opening yesterday so that's kind of an inside day. that tells me that the market is a little uncertain here. it's checking its own vital signs. taking its own pulse. taking its own temperature. do we feel strong enough to go and make new highs? do we feel like we're going to break out here and there's some uncertainty as they continue to test. it would appear we got a boost this morning out of europe even the russian markets bounced. people think crimea's not a major burning issue anymore. for today. >> but with troops massing on the border all week. art, fatigued is how some people describe the market at the moment. bank of america says there's near-term vulnerability, but as far as the vital signs are concerned they are pointing to

the breadth of the rally that we had at the beginning of march and they say that's actually a very strong underpinning. would you agree with that? >> it is. the market is not like a child's primer, it's not really easy to read and you have to look at some of the things. for example, people look at the improving breadth, okay, the advancing stocks. and then they look the other way and say, wait a minute, we're not making as many new 52-week highs. and -- >> the markets flat -- forgive me for interrupting. the market is flat for the first quarter. >> what you got to look at there's a sign of rotation. if xyz were going up and up, it would make 52-week highs and now if we were going to rotate and take some money off of that and put some money into a different stock, that stock will advance but we won't be making new highs. you got to kind of read between the lines on some of the indicators. i don't know if we're ready to say they're fatigued yet. we need some more sign of that. going to watch over the next

week or two and see what's happening. there are those who feel that the fact that the tapering is really kind of kicking into critical mass here has been a fact. peter borkfar who you had on here pointed out this morning that the biotechs had pretty vicious selloffs when we ended qe-1 and 2. >> he correlates that with the fed balance sheet, momentum, speculation. >> do you think all this retesting and retesting is weakening the resolves of the shorts or the longs more? >> well, you know, the longs have pretty much had it all their way. and i think what they look to see is, for example, smart rally today, oh, boy, we can make the case that we just went in to buy the dip. what will be critical is how we close the day, you know, yesterday we opened nicely better. and couldn't hold on to it. we saw some of that on friday with the expiration, so i think a lot of people are going to begin to watch the last hour. the bulls have had the momentum

for a long time so i guess if there's anybody going to be discouraged i would lean a little bit more toward the bulls being discouraged by lack of progress. >> the japanese yen is weaker and that's always a bullish sign. art cashin, always good to sue from ubs. for more on the markets let's get to rick santelli and the cme for the santelli exchange. >> ira, so much has gone on since last we talked. let's start out with last week there was a big fed get-together and jeremy stein happened to write a paper and make a speech. it's always important you like jeremy stein. what did he say that really struck a chord with you? >> jeremy stein basically said it's in the conclusion which is the fed models and sees it as don't take into consideration financial market vulnerability or risk, what he calls fmv. and markets need to become more attuned to understanding that fed policy -- >> give me an example of the risk he's talking about. >> when he looks at bonds.

when bonds are mispriced, when you have duration risk is too low, or financial risk based on expiration is too low, that's a signal that the fed policy may be just like the other way and you have to adjust for that. >> let's take two things so everybody can keep up with us. on the first one it's imperative in jeremy stein world to have some kind of fair value price in mind and i contend that all of the fed programs have made assessing fair price in had almost every market nearly impossible. agree or disagree? >> when i read his paper he agrees. in fact, he says so much that if it screws up for lack of a -- for the educated word for harvard, if it screws up the financial risk profile that they should back off even though your unemployment, he says this specifically, even if unemployment has not gotten to what you may have as a target but financial risk is built into the system, back off from an easing policy and reassess to where you are because the risk from financial vulnerability may be far greater than whatever the

impact of the unemployment situation is. >> let's go back to the yield curve. a lot of implications being drawn. you mentioned duration. so, basically the flattening of the curve is shortened the duration, okay, the sensitivity of portfolios is less sensitive. but, part of that making these conclusions inherent in a dynamic yield curve, you and i believe that the flattening was due to a position. explain. >> well, do you know what, last year bill gross was very out, he was on cnbc talking quite a bit talking about the greatest play three to five -- >> a lot of the funds were in love with the three, five-year. >> a lot of them thought there was better value as long as the fed was going to be this active and now all of a sudden you and i talked many times i don't think the five year is priced at all because it was negative real yield. now the negative real yield ism coming out of that. >> where inflation was. >> and that's all we have. if inflation was 1.7 and the

yield on the five-year which it was until recently was about 1.4 it was a negative real yield. now the market's repricing itself. >> we're out of time, when it comes to sanctions the market was penalized, the stock side or currency side of russia, one thing you brought up real quickly explain what it is. >> i think you have to be real careful with the sanctions. because the united states is the backbone of the international financial system -- >> we have to twrowrap here, if always look to the u.s. as the capital, i don't know where you find the gray line when it comes to sanctions. back to you. million dollar madness next on the show. a special edition of our million dollar home series when we return. ♪ mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971.

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♪ all right. let's head it over to dominick chu to get a quick market flash. >> check out shares of solarcity, the company said it received a loan of $250 million from a group of lenders including bank of america, merrill lynch to produce solar powered systems for homeowners and businesses. it's the biggest solar aggregation to date for solarcity, it is off session highs but still up around 2%, simon. over to you. >> thank you very much, even better news, dom, cnbc's popular million dollar home competition is back. seven homes are battling it out to see which one is the best bang for your buck and since we're in the middle of march madness all the homes are located near schools that have recently won the tournament. here's how it works in each show today on cnbc two one million homes will face off and the

winners will advance. the champion will be announced in "closing bell." the teams in play this round both hail from north carolina. it's the duke blue devils versus the north carolina tar heels. which one is where? we'll figure out that after we get a look touring the homes are diana olick and sima modi. >> this elegant two story european style home sits on ten lush acres. it has a four-car garage and extra space for your recreational vehicles but if you don't feel like going out there are mountain views from every window. >> at this estate exclusivity meets luxury, sitting on about an acre this custom built three-story brick home offers access to the governor's club just one of the perks of living in an update gated community. >> these gracious archways make it feel as if you're coming into a stadium and with 7,500 square feet and 19 rooms, it may as well be one, but forget the food court, this gourmet kitchen is the only zone you're going to

want to be in. >> this 5,300 square foot home is ideal for nature lovers, a wide open floor plan, a spacious den and a state of the art chef's kitchen help this come alive. >> this first floor master suite has a fireplace and a bathroom with a view. there are four more bedrooms and six bathrooms so every family member can watch whatever bracket they want wherever they want. >> with four bedrooms each with their own bathroom, visitors will feel comfortable in this home, soaking up some rays in the two sunrooms and get work done in the quiet office or unwind in the steam room and spa bath. >> this house is an athlete's dream no matter what game you play. and at a million 50, it's a slam dunk. and, yeah, identify just did that in a dress. >> the real sell point is this expansive golf course right in your backyard. enjoy the views from the renovated deck or try your hand at scoring a hole in one. if you can swing $980,000 the

ball is in your court. >> love it. joining us now is real estate super broker dolly lenz. those are pretty spectacular homes. >> look what a million dollars buys you outside of new york city really. >> i'm impressed with the hole in one and the basketball. >> in heels and talking. >> i know. amazing. which houses did we like? what do we think? >> i'm going to guess -- i'm not a fan of gated communities but i think you might like the gated home. >> you know me too well already. that's really bad. >> how about you, simon? >> well, then, i'll go for the other. the one that diana had. >> well, you know, and you? >> i actually libe t lly like t. i thought the kitchen looked nice. i don't spend any time in the kitchen. >> why do you like gated? they are easier to resell? >> yes, they are easier to resell. if you put the money where diana is, and i love diana and i love

her great body and all that exercise, but do you know what, the house that she's representing has ten acres. >> yeah. >> a lot of work. a lot of maintenance. it's not close to anything. and it's replaceable. right? so, we look at sima's house and it's a grated community. it's petite. it's able to be handled by anybody. >> interesting. >> not a lot of maintenance. not a lot of inventory in that area either. >> have we done the great reveal? >> no, we haven't. >> there we are. >> we've done the great reveal. >> talk us through it. chapel hill. >> it's an amazing house. it's truly something that's not so easily replaced only three others on the market like it. 28 months of inventory in dian diana's area. 28 months. that market is really slow still. really lagging. >> and compare that to, say, new york. >> no. >> polar opposite. >> exactly. and we're not even a million dollars, right? >> i think new yorkers see that and they see the

7,000-square-foot for a million dollars and they don't understand that that's possible. >> the number of texts i am getting today about, wow, they love this whole series. because they're shocked at what a million dollars buys. >> i'm wondering if you're kind of coming at it like a trader in manhattan, i need to resell it for a lot of people anxious to lock in for afully-year mortgage this is a destination. they don't necessarily need to resell. >> you don't know what you'll need, it's a changing world. you get fired from your job and you have to relocate, now what? it's not like you are tied to an employer for 30 years the way you used to be. uf always have to think about i may have to get out of here. my money is locked in a nice safe deposit which one is best? >> do we know much about the tax situation in north carolina or in these areas? >> the employment situation is good in both areas. >> a banking hub. >> which is good. and tax situation is also good. >> okay. >> both of those are good. it's just a question of maintenance and all the other issues close to, you know -- >> now is the time, dolly. >> now is the time. >> who won?

>> who do you think won? >> the gated community. >> of course. today rahm emanuel tweeted that people are definitely picking and, of course, he's slightly slanted, people are definitely picking cities over suburbs today. people want to be in a hub. want to be close to life. and want -- >> want jobs. >> want jobs exactly. >> we should do a housing show for an hour every day. >> with dolly? >> yes. >> called "hello dolly." >> and sima. >> thank you, dolly. loved seeing you again. >> loved seeing you. >> the gated retreat wins round two and will move on to the semifinals. let us know what you think, tweet us, and catch dolly in "the fast money halftime report" to see two new homes battling it out and later she'll crown, of course, the winner during "closing bell." >> and she'll probably close a couple deals in between all these. thanks, dolly. >> hopefully megadeals. carnival is out with a beat

this morning. we were expecting it to make a loss on the quarter. we'll speak to the ceo of carnival later in the program as he attempts to turn around the largest cruise company in the world. two brands carnival and costa. ♪ ♪ [ female announcer ] who are we? we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's work. we strive for the moments where we can say, "i did it!" ♪ we are entrepreneurs who started it all... with a signature. legalzoom has helped start over 1 million businesses, turning dreamers into business owners. and we're here to help start yours. turning dreamers into business owners.

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welcome back to "squawk on the street." i'm kate kelly with breaking news on sac hedge fund manager steve cohen who is considering settling with the s.e.c. over civil charges that he failed to supervise two errant employees. these charges filed last july just days before a parallel criminal case was filed by the justice department against his term sac. six to eight months later a lot has happened. the fund is essentially a family office. it will be changing its name in a week or two. the criminal settlement for $1.8 billion is expected to be settled by april 10th. in the meantime, this s.e.c. civil case is set to resumed. i'm told cohen is key in -- or the key for him will be the nature and length of a proposed securities industry ban of some sort. the head of enforcement last summer when the case was filed at the s.e.c. said they are looking to ban cohen from managing public investor money, carl.

so, of course, the devil is in the details now for cohen. hands on manager. he is no longer managing public money for the most part but the question will be is k. he provide strategic advice, trade asset, manage his team? all of that will be an issue as we look to resolve this one way or the other. >> important development in a potential new chapter, kate. thank you so much. tweet time this morning. google glass getting a little more stylish with help from brands like oakley and ray-ban. brings us to squawk on the tweet. oakl oakleys, diane van furstenberg, sky divers. what should google do next to make glass cool? [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]

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and find an arthritis treatment for you. visit celebrex.com and ask your doctor about celebrex. for a body in motion. propose a law banning the systemic collection of america's phone records by nsa and we might see a bill in the house as early as today. eamon javers is in d.c. with more on this. >> good morning p we have a live look in here at capitol hill press conference. we're expecting to begin here any minute for the house of representatives is going to inaugurate a new bill focusing on the fisa act. in that we're going to look at detailed proposals on what to do here in response to the criticism following the edward

snowden revelations. let me walk you through some we're expecting to hear from the house of representatives here in a couple of minutes and bipartisan act will end both collection of meta data under fisa, the foreign intelligence surveillance act. telephone, e-mail, internet surveillance and ban the collection interestingly of records on bulk firearm sales, library, medical, and tax return records. all of that in the house of representatives this morning. meanwhile, the "new york times" reporting today that the obama administration is working on its own pro foposaproposal. the proposal would also end bulk phone information collection. that's the meta data we've been talking act. the records would stay with the telephone companies and the nsa could access the fine with a judge's order. so the question here is going to be how will the telephone companies react to this proposal from the obama administration. they're going to be the ones on the hook for maintain that data as they always have been. and now judges will be authorizing nsa to dip into it

on a case-by-case basis as they decide that that's intelligence the u.s. intel community needs, guys. >> no coincidence on timing, eamon, that obama is going to be the summit tomorrow. a lot of europeans are angry with what the nsa and others are doing, for example, merkel's phone. >> and we see members of the house coming in to announce their proposal. no coincidence in the timing here. everybody both in the house and at the white house is trying to get ahead of this post snowden reformer a that we're answering now trying to figger out how the nsa can continue to do what it does and protect americans while at the same time protecting privacy. very difficult issue. >> eamon javers following security and the white house for us. we'll keep an eye on that. meantime, looking at markets. cutting our gains in half. still the dow, s&p, and nasdaq all in the green. art cashin, ubs really resonated when he said this market is looking thiired.

he's not convinced because we haven't made higher highs. >> we were up 120 plus at the hoping. now up 41 on the dow. s&p is back to 1860. the ten-year, sarah, is below 1274. so this might be a little bit discouraging for the bulls. art said to watch that last hour, particularly. >> we had -- there was an interesting note from jpmorgan that came out yesterday and they were saying actually the equity market is not over-stretched at the moment unless you keep seeing earnings being revised down, carl, or you do get a substantial rise in interest rates and that's to the discussion we were having earlier. >> over to you. >> thanks, guys. here's what you missed earlier on the you're just joining us. >> welcome to "squawk on the street." here's what's happened so far. >> people will sell high multiple companies, high multiples to sales, in order to get in on other high multiple sales when you get a pop. as long as that happens, i can't be saying anything about a

recovery. >> i think investors are in the market when it -- they know there's momentum and n. home prices. more than in stock prices. and they were own observing these big price increases and it's enticing. now it may not last and the investors may be gone. >> consumer confidence in the conference board, 82.3. richmond fed, that's next in line. that's also march read. that's minus seven. for a february read on new home sales, 440,000. >> this could end up bag one-trick pony. i don't know that they're going to be able to catch lightning in a bottle twice, simon. quite frankly, anybody that's going to get it is going to have to have one high on it. >> it is 11:00 a.m. on the east coast. 8:00 a.m. out west. here's what we're watching for you today. box files for an ipo. google glass tries to to be

cool. and blackberry's proposed sale gets denied. we will have a star of "shark tank". shares of carnival is struggling after weak guidance. we'll have the ceo about it in an cnbc exclusive. will the garden street go green? we'll have details on a bill that would legalize pot in the state. walt mossberg here. it's a good one. we will bring it to you later on this hour. >> that's called a tease. joining us from the squawk feed this morning, kevin o'leary, care man of o'leary funds, author of "the cold hard truth on men, women, and money" and investor, mr. wonderful from "shark tank" and jon fortt joins us was well. box finally revealing plans to go public. the company is unprofitable plans to raise $250 million as it tries to ward off growing competition. we talked to box ceo aaron levy on this show and he talked about

what sets his company apart from the competition. >> we have very healthy competition in the market. i think our unique differentiation is we're probably the only company that has a focus on the end user and consumer from a delight and user experience standpoint that can also deliver their technology into large enterprises. >> kevin, i can't wait to get your take on this. they are not making money. they don't expect to make money any time soon but they're in a business, online storage that is going to go 300 fold over the next few years. >> i look at it this way. this is a capable ceo. been basically working for the venture capitalists that have been in it a long time. they would like to cycle out of it now. i would never thought an ipo would do a strategy for this business. this is a commodity by any metric. cloud storage is a very, very come modized, brutally competitive taste. why not sell this to a strategic

unless you thought you could tweak it with an ipo promise and get the maximum price from a large player. i would never ever touch this stock. >> we didn't know that they didn't try though. that's the thing here. jon, you were tweeting this s1 filing as you were going through it after the bell. they're spending more on sales and marketing than r&d. you don't normally like to see that on a tech company. >> that isn't so much the problem that i see here though. their revenue per user. they counted 25 million users as of january 31st is about $5. their cost per user is $10.25. much of that driven by sales and markeding. interestingly, if you dig into the s1 last quarter they cut sales in marketing spend compared to the quarter before for the first time which suggests either they figured out how to make things grow without spending $7 million a quarter on sales and marketing to generate

5 million additional in revenue. a concern also emc and some other tech giants are jumping into this space. emc has simplicity, very slick app. it's got the benefit of emcs already existing sales and marketing, upselling that. box is up against that unless it can pair up with -- >> you're on the show with cuban who is one of the earliest investors in this name, now out. actually tweeed about it yesterday. does that color your view in any way? >> i invest with mark in deals. i think mark knows exactly what this thing is, which is probably why he's not a shareholder today. it is a very difficult business model. when your customer acquisition cost is twice that of the lifetime value. that business model takes you to zero eventually when you stop being able to raise capital. they've got to sell this thing to somebody who is going to roll up the industry. they're not going to be around in a couple of years. if you're a shareholder now you want to exit. >> do you fault them as company for wanting to take advantage of this parmarket?

>> no, but i'm starting to ask a simple question as an investor. over the last 40 years, 72% of the returns of the market have come from dividends. in other words, capital back to shareholders, not capital appreciation. why would you touch this stock? it has no free cash flow. it's a commodity. it has no reason to exist other than it's got users now. sell it to somebody that cares. >> the counter argument here, and i'm just going to put it out there, not that i believe it, is whatsapp, in a way similar, messaging is commoditcommodityi. this is an enter prize play. >> you should have multiple bids for the value of those subscr e subscrib subscribers. if any large player can afford to actually continue to spend money they would buy it. if if there's no bid and you're a buy ef of an ipo, exit stage left immediately. >> meantime, google glass getting a little extra style.

the company partnering with the largest eye glass company in the world, the owner of popular brands like oakley and ray-ban. now they're clunky at best and this is a big effort to make it mo more attractive to mainstream customers. at 1800 a pop or how much they decide. how mainstream is it, kevin? >> when i see people wearing the glasses take look like breaozos me. maybe it can be hip if you make it look ray-banish other than looking like a mr. roboto. you look like a nerd. >> the stix reference. very nice. >> popular in certain neighborhoods of san francisco and brooklyn. >> nerd factor six. >> here's my issue. you hear google people talking about it, well, it's a high hurd to get people to want to wear this on their face. why are you trying to get people to want to wear it? many of the personal technologies that have become popular, the things we carry

around are things that people immediately want to carry. cellphones, you don't have to convince people to carry it around. that doesn't make a lot of sense to me. the bulkiness of it, that's not a fashion issue. google engineers have to work on that. >> google is trying to reinvent this. they gotten doors ms from diane van furstenberg. they announced they were coming out with newer styles. what do we take from the fact that they are bringing on another partner upon years of trying to develop this? >> it's hard to convince people to wear something the size of your pinky on your face. that's -- in other words, there's too much push. >> right now, there should be. >> usually with something that you're wearing. something that you're carrying. you don't have to convince people. they just look at it and there's a lust factor. >> the price point is a huge issue regardless of how stylish it is. the majority of people will not spend that much money for this device. whether it's $14 and it's hip to wear it and all your friends are using it, then it's a consumer

good. this is nerds. >> if it's a high-end purse, 1,000 bucks, people will want it. >> if they were pitching to kevin on the show and said i've got up with a camera and a screen that fits in your eye glass, you wouldn't think that's cool? >> carl, this is the segue of eye glasses. remember how hot that product was going to be. >> cops still use those, you know. >> cops maybe will use these. >> it does bring us to this morning's sidewalk on the tweet. oakleys, diane van furstenberg, sky divers. what should google do next to make glass cool? finally, cbc news reporter that blackberry tried to sell to he nova last year. company was ready to go ahead with that deal but not a firm no when approaching the canadian government for approval. jon, you've been following this story pretty closely. are you surprised by this? >> not really surprised by the good news here is that the report said specifically to a chinese or a russian buyer canada said no. doesn't say anything about korean buyer. if blackberry can pivot a lot

more toward enterprise services and security which is where samsung wants to be, if samsung safe doesn't take off, it becomes potentially an attractive play for them. >> kevin, is this the ghost of nortel past? >> yeah. >> didn't the government win from that? >> i've been an investor in canadian telecom companies for decades now. in the last four years the canadian government's policy on tell con including this deal has become very aggressively negative. there's cases where other nationalities brought foreign capital to the canadian market, were given one message and two years later, changed policy on them. canada is not a good place to invest the incremental dollar in telco. they mentioned telcos and cable company specifically in a negative fashion. they want to break up the actual menu in the cable boxes, a la cart. two-year contract on the hardware with handhelds. i think you don't know what the

new business model is yet until the canadian government is finished carving it up with a knife. i think they really screwed blackberry shareholders on this. you can't tell me that ibm can sell laptops to them and you can't sell a blackberry. it was a huge mistake. i think shareholders got killed and canada is scaring money away from is country. >> and don't forget we've got google selling motorola to lenovo also. they were shopping around for something. >> in general, you hate anything that gets in the way of your soldiers. >> are you telling me the market knows what we should do with a company like blackberry or that two bureaucrats in a room behind a desk with a light bulb hanging over them should determine the fate of these companies? where real shareholders put capital in harm's way. now they don't know if they can get out. i hate it when the government tries to manipulate markets in any country. >> even in your home country. >> absolutely. i'm an advocate for free markets and certainly want to support business. but when you put money to work

and sometimes it works, sometimes it fails, you have to a have an exit. all of a sudden the government decides out of nowhere you can't sell that company to this nationality. it's a form of financial racism. that's what it is. what's wrong with russia money? what's wrong with chinese money? >> i think in the case of blackberry you've got security interests there. certainly within canada. >> you don't have that on a lenovo laptop? >> you've got it. >> or motorola handset? >> on just about everything now given what the nsa is doing with hacking. last year perhaps the calculus was different. >> and fertilizer companies, natural resources. what do you think needs to happen in canada for the government to figure out if that's how it should go? >> your referencing potash deal was ch was a disaster. the government out of nowhere decided this was a national security issue and this comes out of the rear end of a bat so it doesn't make a whole lot of sense long term for their

decisi decision. i ask myself any environment that scares away capital, regardless of its nationality, is going to become less competiti competitive. i think voters in canada will event xhul lly say we want a government that attracts capital to a country. natural resource base. it needs billions. i think the policy the canadian government, i'm an open critic, canada has to open up its environment for investors in every seconder. you brought up potash, telco, it's a horrible place when the government can decide against you when you want to be an investor. >> kevin, come back for the box ipo. >> i will. >> kevin o'leary joining us today for squawk feed. you can catch kevin on back-to-back episodes of "shark tank" tonight. >> shark tank tuesday we call it. coming up here on "squawk on the street," shares of carnival taking a hit this morning even though first quarter earnings beat analyst estimates. the ceo of carnival will tell us what went wrong a little later on this hour.

plus, is legal marijuana coming to new jersey? one state senator is doing his best to make that happen. we'll talk to him in just a few minutes. first, rick santelli in chicago. what have you got your eye on this morning. >> well, i think i continually trying to update how comments on cnbc this morning may affect treasury trading. we're going to look at what he said. we're going to look at the yield curve. we're going to look at what's going on in europe with potential quauntd tative easing. and we're going to put all that in one easy package called fits of normalization. right after this break. to manage your money. that's not much, you think except it's 2 percent every year. go to e*trade and find out how much our advice and guidance costs. spoiler alert. it's low. it's guidance on your terms not ours. e*trade. less for us, more for you.

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look at the health kcare sector. dominic chu has that. >> it's dropped off a little bit since the beginning of the hour. it's come off a bit. the health care seccer was the worst performing sector in the s&p 500 yesterday. today one of the best ones, like you said. the biotechs are rebounding for now after two straight sessions of losses now leading the way higher. check out names like gilead science which precipitated the sell-off when lawmakers questioned the cost of certain hepatitis treatments. it's followed by all of these names, ones more volatile in this kind of trade still. moving toward session lows now along with the rest of the market. carl, sbreing to see whether these biotech names in health care will continue to be a topic for discussion among traders. back over to you. >> the locust of attention today, dom.

let's get over cme group with rick santelli. >> hi, carl. before we get going, i want to put a couple of charts up. if you look at the ten-year yield minus the two-year yield, it isn't going anywhere fast. i find that very important bring up because ultimately the two-year is kind of being controlled by the fed but once you get beyond the two-year we see what's happened. if you look at 5 tos to 30s ande 30s have not gone anywhere significant since the fed meeting. that flattening is dramatic. bring in mr. prosser this morning, great interview on cnbc. steve, you did a terrific job. not that we didn't already somewhat know it before, but fed funds, where will they be in 2015? 3%. 2016? 4%. as easy and simple as this may seem what this means is for 2015

we're going to have to figure out a way to pack 275 basis points somewhere along the yield curve. and what we've noticed so far from these charts, you know, that will be two year, that will be three year, five year, ten year, 30 year, what we've noticed is, is that on the fed day what happened is all of this selling was pushed down the tube of toothpaste to the short maturities. those yields moved up t flattening the curve. the reason it's important is why it happened is almost more important than the fact that it did happen. because if these were just positions coming off, what we have seen since is that we can't seem to get any yield upside to the 10s and 30s to speak of. it's like heingitting a wall. but similarly on the short end we can't get any bidding to bring rates down. hence, the curve sits. but where's that 275 going to squeeze? are we going to see a dramatic flattening in the yield curve

because it's all going to pack in? remember, when it comes to the long end there's a lot of things to consider that nobody the talking about. six-year chart of ten-year treasuries minus ten-year booms. you will see that our ten-year even in a very behaved scenario, the distance between the ten-year boon is getting wide, almost six years wide. so what we are starting to see is not only the arbitrage you normally see, we're seeing it intracountry. selling t in the u.s. and buying in boons. but what that mostly is going to do is continue to keep the buying mostly on the long end. so the direction of the economy and what did he say? data dependent versus market dependent. let me give you a clue. the market side will win. back to you. >> all right. thanks so much for that, rick. always enlightening to talk to you. meanmeanwhile, a lot of ecoc data this morning. it may be changing the way

people are looking at economic growth. steve liesman is back at headquarters with the first edition of the cnbc rapid update powered by moody's analytics. it's a new market wide measure and how much an economic report changes the street. interesting stuff, steve. great graphic. >> cool graphic but it's going to get more interesting as time goes by. right now i want to give you that rapid update and tell you the new home sales which is the data today that does feed into gdp did not change the tracking forecast. the economist who we surveyed are still looking for 2.2% growth in the first quarter and their growth is 3.2% for the regular draft. let me explain this quickly which is we have a wide disparity right now t in the outlook for growth. what i'm looking at here are guys like joy looking for 3 lf 1 and then mark zandy looking for 2.6. what we're going to do now is when all this data comes in

we'll see how this updates the people who are following here, they're tracking forecast. we get a measure and are able to translate essentially all of this data, carl, into gdp points and make it so you can compare and see how important eaches piece of economic data is for the market, investors, and the growth outlook. carl? >> a busy morning for you, steve. than a lot. the annual nightclub and bar show kicks off in las vegas this week. looking at the business of adult beverages. any kind of beer and liquor you could want is available along with some more interesting product products. so jane wells, what do you have your hands on today? >> carl, bartender, i said i wanted a large. we're going to be talking booze here in vegas but at what point do those pricey cocktails get too expensive? look. an otter pop for adulting. and a tequila story you're not going believe, when we come back. back. ♪

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no longer a fad. craft beer is taking on the multibillion dollar beer business and winning. how is craft beer stacking up against spirits? jane wells is live in las vegas taking a closer look. jane, you were made to cover this show. >> i don't know what you mean by that, carl. this is the conference that your bartenders come to to figure out what's going to be hot in an industry that sells $20 billion in adult beverages a year. yes, craft beer is hot. spirits are hotter. they are saying the hard stuff is continuing to gain share in total alcohol at nearby 30% of revenues last year. especially popular with millenals. high end and super premium spirits are growing the most. bar and club managers are here learning how to price these more expensive drinks without turning off consumers because americans

recently pulled back spending on booze when they go out. >> you know, the word mixology adds $3 to the price of any drink. people are resisting that now. they're starting to push back. i don't need my drink made in four minutes you. one minute is fine and i'm pay $3 less for it. >> taffer is hilarious. bottled cocktails, low calorie frozen cocktails. and move over vodka, here comes infused tequila. >> i would never know this is tequila. >> you will when you drink it. >> wait until you hear this story. george is a bar own whole likes to concoct things. cinnamon and pineapple in tequi tequila, called it dirty. dirty rum is next. guess what, he's mormon. he doesn't drink. >> do you drink it? >> no. >> ever? >> no. what i know of tequila, it's got a harsher back end. so i grab a tequila and said,

cinnamon is going to mask, pineapple is going to mask. start throwing it together. it just happened to be what i picked that night. >> do you have any curiosity about how it actually tastes? >> no. i know it tastes good. >> he's like the beethoven of booze. later on cnbc.com we're going to talk about craft beer, how bud, miller, and coors are competing. on "street signs," adam corolla talks mangria, back to you. >> jane, you know, a lot of people wonder if we're in some kind of bourbon bubble. it was on the cover of "fortune" magazine a couple weeks ago and we know about the jim beam deal. how much talk is that getting over there? >> it's talking about a little bit but bourbon sand tequila are now the fastest growing. they have surpassed overall whiskey. they're way ahead of vodka. i think with the talk here is that all these things seem to be trends. they'll spike up because they will become the hot new thing.

then they'll level down and find their new level. what people are willing to pay for it. the next thing comes along. what i'm hearing more though is the ipas, the i p a craze, some is getting so hoppy, i can't even drink it anymore. and is that hurting the overall craft beer industry? are newcomers hurting the whole brand as they bring in potentially inferior products? >> very low barriers to entering the market, jane. it seems like there's a new craft beer every week. what are the after parties like at a conference like this? >> i wouldn't know. i have no idea. >> no, no, of course not. >> jane wells, in las vegas. we'll talk to you later on, jane. thanks. in the meantime, dow hanging on to a 54-point gain. dom chu has a market flash. >> i'm more of a buffalo trace bourbon myself so i guess we'll go that way with jane wells. check out the so-called momentum stocks.

still losing ground again. check out priceline, netflix, ch chippotle mexican grill. overall the momentum names are a focus only because they've had a huge run-up and now are giving back some of the gains. we'll wait to see if that becomes a broader theme if it does some to fruition. back to you. >> save that hot board, dom. we want to clarify a piece of steve liesman's hit. it should have been referencing the second quarter, not the first. it is correct as you see it here right now. just want to make that absolutely clear. especially as everyone is hanging on to that data. we want to talk about legal pot. . it's been a big topic on this show. it could be coming to the state of new jersey. that's if one local lawmaker has his way. he's pushing a new bill that will legalize and tax marijuana across the entire state. we'll get to the detail of that plan when "squawk on the street" comes back. comes back. [ bagpipes play ]

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look at this map. new jersey in gray is currently allowing a restrictive form of medical marijuana. but could the state soon turn as yellow as colorado? that's when one garden state lawmaker hopes to achieve after introducing a bill this week that would allow adults to purchase and grow a limited amount of marijuana for personal use. nick is a state senator from new jersey and joins us now with more. sir, good morning to you. thanks for being with us. >> thank you. >> what's your rational behind

this bill and why this should change right now? >> well, there's a number of different reasons not just sociobut economic impact to new jersey. first and foremost, we really need the money. secondly, people are doing it anyway so the state should ensure our citizens get a fair and clean product which is through regulating, taxing, and ensuring marijuana is safe for people's ingestion. >> there are some steps seen as precursors to actually legalizing recreational marijuana. making medical marijuana less descriptive. why not go there first? >> well, we've already got medical marijuana in new jersey and we have the highest regulated medical marijuana in the entire nation. only 1700 people have been able to register for the program. the economic impact from that hap has been virtually nil. moving in this direction is a recognition of what our citizens is engaging in and for our economy. >> critics say this is politically dead on arrival

because of the way the state politics currently favor. but there's an editorial in the "star ledger" in new jersey, very recently, that base which says, the tide of public opinion will change but this bill will not succeed. how do you view that? >> i think this bill is going to move in a positive fashion. the state lawmakers that i've spoken to all privately seem to support the bill very few would privately say that they're not in favor of the bill. there's a recognition this is the way we need to go. if we look at the prohibition of alcohol in the early part of the century, we create crime and lost money. get rid of the crime, take our street corners back and create a revenue stream. >> what kind of revenue are we talking about? what can you project out and where would taxes fall on this? >> there will be a taxation scream, minimum, 7% sales tax and maybe additional excise tax as well as additional user fees. so if we go down the same taxation scheme as colorado given the population trends of new jersey and proximity to philadelphia and new york,

probably talking about a quarter of a billion dollars in just tax revenue. not to mention all the savings that we'll have if we make it legal. >> directed towards schools, toward general purpose? what do you do with it? >> the first part of the bill indicates and puts a forward for transportation trust fund needs which is our road improvements, bridge improvements, an area where we are sorely lacking in money. i don't want to be the first person to see a bridge fall down in new jersey. not to mention for safety concerns. there's been talk about raising the gas tax in new jersey. we have one of lowest ones in the nation. that hasn't got ten any traction. we need money to improve our roads and infrastructure. here's a way we can do it without raising taxes. >> even in states where this has been successful, colorado and washington are the two, it didn't happen overnight. how long do you see this battle playing out? >> that's correct. that's why we're starring now. even with a governor ho is not in favor of the bill as he stated. i think that when he looks at the facts and revenue stream and cost savings and he looks at the soesh economic impact it's having on our citizens he might

take a second look at it. >> i was mentioning during the break a story about colorado and how some pets are accidentally ingesting marijuana. vets are seeing that on the rise. do you admit it's an imperfect solution, there are societal costs even though it's an economic boon? >> there are those costs already. you can walk down the street and get marijuana. let's have a realization of our citizens are ingesting the substance already. it's already widely available to people. let's regulate it, tax it, ensure its safety and make everyone is safe. >> thanks for joining us. take a look at shares of karn carnival after taking a hit. it's down almost 6%. is there reason to be worried about the world's largest cruise line? we'll talk to the ceo of carnival in a cnbc exclusive in just a moment. latte or au lait?

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then the million dollar madness continues with the university of kansas' hometown facing off against a home of the florida gators. it is all straight ahead on "the half." see you in 20 minutes. >> all right, thanks for that, scott. we'll be watching. meanwhile, watching shares of carnival. down 6%. simon hobbs, you're on the floor with a special guest. >> yep, absolutely. carnival is a big mover after reporting first quarter earnings. to investors it's all about the two brand turn around stories and the price it's able to charge to fill its 100 ships through this year and next. this is the ntsb. kicks off a two-day public forum on industry safety in d.c. here for an cnbc exclusive the arnold donald, straight off the earnings call at his headquarters in miami. it's nice to see you again. thank you for joining us. >> hi, simon. how are you today? >> i'm okay. before we get into the nitty-gritty of the business, let's talk about the customer

facing side of the turn around story and just give us some color on the deal to put the dr. seuss characters on the ships, the deal with carnival live with jennifer hudson singing on ship oroff sent us footage of your newest ship which will be joining the fleet next year. >> as you know, simon, we have ten brands. a lot of focus is on the carnival and costos brands. dr. seuss, the live concerts with jennifer hudson, lady antebellum, jewel, and a host of other entertainers. these are all innovations that our carnival line team have introduced to drive demand and increase the guest experience on our ships. and it's been very successful today. we enjoyed a strong first quarter for the brand as well as for the costa brand and well on our way to recover. >> okay. the issue as you know better than i is the price you can charge for cruises in the second half of the year going into next year. i don't think many people, many

professionals expected you to raise your guidance for the full year to where they are because it's too early. some how old say. but the current quarter, if you look at the yields that you're getting here, the net yield guidance is down 4%, down 3%. i see some analysts suggest that you had to price possibly 8% below where you were. what is price taat the moment a is it all about the troubles that you've had or is it simply the caribbean is too crowded, too much capacity? >> well, there are a number of dynamics. the biggest one, of course, is that last year first quarter was prior to the voyage disruptions that we experienced. and so in a comparison, we expected it to be down. now, we beat our expectations and we see very strong strength going forward for the rest of the year. so i would encourage all those cruisers out twl here to book a book soon because we're expecting pricing to look

stronger through the course of the year. there has been additional capacity in the caribbean and that's added to some of the booking challenges from a price stand point. but as i said, we exceeded our expectations and that affirmed to guidance that we had given to the street. >> you have, of course, righted or your insurers have righted the cost a ca concordia off the coast of italy. one-third of the business is in europe. much higher than your other competitors. what are you seeing there specifically, because if you can get a turn around clearly on the costa brand which is dominant in europe that's going to feedback at the group level to a very large extent, they say. >> and again, we are seeing good strength in europe. in fact, our booking have been moved out our or occupancy rates are ahead of where they were last year. booking for the quarter and for the full year. we see great strength in europe

across our brands. and we're expecting a very strong performance this year from costa and our other european brands. >> the big promise of course that you hold out there to investors is that you as the new guy can come in and get these ten brands working together. the largest fleet on the sea, possibly with the exception of the u.s. navy, and to get the heads of those brands to communicate and to just work like they haven't done before to try and leverage your size. can you give us any firm updates on what you've been able to do? >> we've got a very excited team. our ceos across the brands and then their direct reports have all engaged in the idea of collaborating and communicating and coordinating across our ten brands. and we have found that there's tremendous energy in it. we have identified a number of priority areas to fully explore. and we're well on our way to capturing. we have 78 million passenger cruise days a year across our brands. and we feel we're well on our

way of capturing the synergy that exists across those brands to leverage them. >> can you give us any color on mickey harrison when three weeks ago he announced to the market he was going to sell $400 million worth of shares, does he call you up and say, look, arnold, i've t got to do this. don't worry. i've still got 24% of the voting rights. everything is fine. the ship will sail. what is the nature of that conversation? >> of course he talked to me about it but the reality is while it's a huge amount of shares in general for mickey it's a very small portion of his holdings. he's done in in the past. it's over a long period of time, the window that he sells them through. it's just a natural part of balancing a portfolio and meeting personal needs. mickey has tremendous confidence in the future of the company, as evidenced by the large number of shares he continues to hold. >> it's good to see you, sir. thank you for your time. arnold donald there, the ceo of carnival, joining us live from miami.

as we mentioned earlier, the president is speaking at a joint press conference with the prime minister of the netherlands and commenting on russia's actions in ukraine. let's get to john harwood with highlights. >> there were two big topics. the first was ukraine. he defended himself against those who have said mitt romney was right in 2012 when he said russia was our number one foe. the president said he hadn't most misred president's putin's actions. they are designed to be ratcheted up to prevent in case russia appears to be moving further beyond crimea. here's the president. >> we're not recognizing what has happened in crimea but we're concerned about further encroachment by russia into ukraine. so what i announced and what the european council announce sd that we were consulting and putting in place the framework, the architecture, for additional

sanctions, additional costs, should russia take this next step. >> the president also addressed the ongoing controversy about nsa surveillance. he's got a new, as we discussed this morning, he's got a new proposal coming to the hill to try to change how meta data, the phone records, are collected. but he said they hadn't been spying on either ordinary people of heads of foreign governments. they were collecting data. and he said he was confident that the new proposal they come up with will strike the right balance. >> overall i'm confident that it allows us to do what is necessary in order to deal with the dangers of the terrorist attack but does so in a way that addresses some of the concerns that people have raised. >> and, carl, the president said he was hope that congress would act swiftly to implement in change which would have some of that metadata being held by

phone companies rather than the government. >> john harwood with that. when we come back, walt mossberg is here with his latest review and this is one you're not going to want to miss. and you don't have to wait much longer. walt is coming up next.p ♪ ♪ ♪ ♪ [ 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.

htc is out with a new phone and it has a third camera.

it could give samsung and iphone a run for their money. walt mossberg is the coexecutive editor for re/code and here with his weekly review. good morning. >> good morning. >> you -- i mean, you seem to have a bit of soft spot for htc. >> i don't have a soft spot for the company but i think the products they've done have in the last few years at least, been quite good. last year's hdc-1 was really an excellent phone. i was hardly the only reviewer to say so. but it didn't do anything to really move the needle for the company. and there were a number of reasons s for that. they're trying it again this year with the htc-1-ma which is not a good name so we're calling it the 2014 edition, those of us who write about it, or the new one, most of us. and you know, it's an evolutionary thing. it has a little bit bigger screen, a little larger, a few

more features. and most sbreing one of them is that third camera you mentioned. >> walt, you say that overall the weight is a little much for you. it's about 10% heavier. you would have traded that for the bigger screen. but the camera or any of the other features, is it going to be enough to break through the immense marketing expense that they last year couldn't seem to break through? >> i agree with you. you know, you can't -- no matter how much money you spend on marketing, if your product is junk, in the end, it's not going to work. the irony is if your product is not junk and this is a very good product, and by the way, it's a premium built product. this is more of an apple-like kind of build. it's metal. it's very carefully designed. it doesn't have the plasticy

feel of a lot of other android smartphones. but if you don't -- if you're not able to tell your story and mar market it, then i think you are in trouble. time will tell. htc tells me there are two differences in the way they are telling the story this year. one is they are going to spend more money and more effectively on marketing and, secondly, last year they had trouble getting all four in the u.s. at least, getting all four carriers to release the phone and n. roughly the same time frame. this year they've got today, verizon, at&t and sprint releasing it for online sale today and next month in their stores. they've got t-mobile next month which is not that far away, putting it online and in the stores. so they'll have essentially a simultaneous launch across all the carriers which they did not

have last year. and so they're banking on the quality, the changes, and the better marketing and the better distributi distribution. >> walt, this third camera, is it revolutionary or replicable? >> i don't know because i don't know what the patent situation is and we don't -- it would take us hours to discuss patents. but it's a very interesting thing. it is a camera sensor but it doesn't take pictures. what it does is it collects depth information and that depth information allows you to go back to pictures you've taken with the rear camera and change the focus on them, do paralax so if you tilt the phone it kind of looks a little 3d. because it knows a lot about the depth of the objects in the picture. >> an example of when you would use it, i'm trying to think, what, kids in sports?

what? >> it could be anything, really. in my case i took some pictures of people and things around my house and decided, gee, what would it look like the i had focused on the other part. it really does change the picture. it made me much more pleasing to you in the end. i want to be honest. i think what they put in that uses that third camera, out of the box, at launch, is very limited. they are planning a software developer's kit which is what allows third parties to use a feature on a product. so that other people can use this third camera, this duo calm racks as they call it to do other things. they're going to try to harness the imagination of other people to use this feature. >> reminds me of the early 2,000s when apple was coming out with a lot of great features on its mac but couldn't gain market share because pc had turned into

an eco system game. >> great to see you. >> great to see you. reminder, nbc news group is a minority investor in re/code. tweet time. google glass is getting more stylish with help from oakley and ray-ban which brings us to this morning's squawk on the tweet. oakleys, dionne von furstenburg, sky divers. what should google do next to make glass cool? tweet us. kevin o'leary says it's the zeg way of glasses.way glasses.

gookle glass getting a more stylish with help from italian eye wear designer. this morning we're asking you, okay, oakleys, diane van furstenberg, skydivers, what else should google do to make glass cool? r.g. writes, install it in every window at the home, along the edges of the pool. michael kors for a designer light bulb, kors light. and facebook face recognition and find friends and family in crowds. >> don't suggest it or they will

do it unless you ak actually wa to do that. you know we lost a lot of gains here although s&p is hanging on to gains. nasdaq is now negative. we know how much attention is on b the nas. >> momentum is going in the different direction here. scott, what is coming up? >> you have the pattern developing. you open higher. the market fades. then you're unable to recapture the gains of the early day. it looks as though we're headed for another one of those days as the market is turning. >> see you for the next hour. >> thanks so much. welcome to "half time" show. here are the hottest trades. breaking or broken? is a big pullback in momentum stocks a sign of bad things to come or a pause to jump on? invest like a hedgy, how new mutual funds want to give you the expert advantage. should you buy in or buyer bewa beware? million dollar madness. going head to head with one.