squawk box begins right now. >> live from new york where business never sleeps this is "squawk box". good morning, everyone. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. we have a lot of news to tackle this morning. we have apple and issues hitting the multinationals. let's get to the other stories to watch today. the fed will be wrapping up a two-day policy meeting setting in washington. a statement is due at 2:00 p.m. eastern time. there is no janet yellen news conference this month. we'll read everything we can out of that statement. the latest read on mortgage applications will be released at the top of the last hour. borrowing rates stayed low.

in some cases they have gone down. and don't forget about energy prizes. api reported u.s. oil stock piles surged by 13 million barrels this past week. we'll be getting official data on inventories from the energy administration. the dow was down close to 300 points. this morning you're seeing a very modest rebound. dow futures up by about 14 points, s&p by 7 and nasdaq by 46. >> let's get you through a flood of stocks to watch this morning. let's start with apple posting the largest profit in corporate history ever to the tune of $18 billion. the results blowing away even the most bullish estimates though i did see some worries. >> what do you think -- >> the dependence on the iphone. >> too dependent on the iphone. >> i think i'd take the other

side of that trade. >> you can depend on something not selling nearly as well. i would put all my efforts on something that barely sells instead of something that sells so much. i'm glad it's apple earning $18 billion because when exxon earned $10 billion people didn't like that at all. >> of the top 25 quarters in terms of earnings 24 of them have been oil companies. this is the only time that a nonoil company has broken into the top. it's something they created. >> she said it. >> so i'm glad i wasn't a bank either. i'm glad it wasn't a bank because banks deserve to earn a reasonable profit but not an outside profit as the president told us. most companies deserve to earn a reasonable profit. you can say they're doing socially good things. these fancy gadgets.

>> i'm not talking about credit. i'm talking about whether you actually sort of raise an eyebrow at how much money a company is making. there's people that think companies can make too much money. >> this is true. >> they're not monopolies and there is competition normally and that should be something we celebrate. not something that we raise an eyebrow and think we need to tax. >> commodity prices have changed. >> how about banks? what if they're really good at raising capital and trading. >> apple is one of the most unregulated purely entrepreneurial companies in the world. >> do you have a point? >> no but i'm saying there are other companies, oil companies for example -- >> this is the point i was making about how stupid people are. >> i know i'm the one. >> what is a fair profit for an oil company then? >> i don't know. >> how about a pharmaceutical company? >> actually pharmaceutical company that's a great one. >> because it's not a free

market. >> because it's not a free market. >> if it is -- >> if it is a free market you should be able to make as much money as you can. >> yes. >> thank you. that's a big concession for you. let's tell you about other news going on this morning. this was a big deal and brave one i would argue. yahoo! planning a tax free spin off of its stake in alibaba. this investment is valued at $40 billion. the reason i said it was brave is without this all you have is the company. >> so now the company will be purely measured. >> marissa is going to be measured for what she is doing and nothing else. whether it will be enough for starboard who is pushing for the spin off of this and yahoo! japan and merger. >> i would give her time. >> a brave decision to do that. >> worth $45 billion so they

spin it off. i don't know how it works. >> you still have yahoo! japan. you're not done yet. some argue yahoo! japan could be worth $7 billion. >> still valuing it as a negative. >> depends. >> depends. >> i don't know if i would do it. i think i'd like it and i guess you want is to be stand alone to see how you did at some point. >> plus a tax freeway of doing it. >> doing the best way she can do it. there's less court and juriousageous ceos would keep them in the company. >> masking your own. >> gives you a honeymoon period. >> hopefully they'll look at it and somehow find a way to take half and spend it on good things. >> let's tell you about results from at&t because they're topping estimates. so much bad news yesterday. mobile device deals attracting

more as company's users switch to a higher rate and they got a boost in sales forecast. and juniper networks beating the street saying cost cutting is paying off. >> we're in the middle of all of the results and there's other movers this morning. electronic arts posted better than expected earnings in sales. they had digital sales of sports titles. shares of abiomed is announcing the fda approved it's heart pump. amgen's earnings topping estimates in part because of its drug imbrel. they're less exposed than other drug makers because only 25% of its sales come from outside of the u.s. i happened to notice the sales

number yesterday and it was multibillions in a quarter. they started with nothing and they have got a couple of -- they worked and they were clean. and just watching this was a great thing. i watched the stock go from a dollar to 1500 dollars and u.s. steal beat the street but it warns low oil prices and the strong dollar could negatively impact it's business this year so it suggests potential for higher u.s. spending and results from vmware. topping consensus. the company seeing strong demand for its products that help cut

the cost of moving data to the cloud. it's a very expensive move. >> microsoft talking about it. ibm talking about it. >> i need to buy more storage for my iphone. >> yes. >> how do i do that. >> we need to put your credit card in. >> you don't need a password? >> no this is a cnbc thing. >> so then just say forget your password and they'll e-mail you a new password. >> okay. >> while these two are figuring this out why don't we check on narcotics again this morning. it shows you futures and things were looking better than yesterday yesterday. at one point yesterday the dow was county by 390 points. s&p was down. those were the lows of the day. they did manage to come back. that was a decline of 1.6%. s&p was down by 1.34%.

it was a rough day yesterday. let's check out and see where european markets are trading this morning. they're in the red once again. the cac is leading the way down among the major markets. it's down about .6% with the ftse and dax down about .3%. doubles exist in greece where they vnhaven't gotten what they expected. in asia markets were weaker following what we saw here in the united states yesterday. sang high down was 1.38% and if you were watching crude oil yesterday it rallied about 2% as the dollar fell but this morning it's back down another 77 cents. the dollar yesterday as we mentioned actually fell snapping a three game winning streak. you saw the euro bouncing back slightly. it's yielding 1.8% and let's

take a look this morning to see where the dollar stands. we had that fed decision today and that's what was putting a little bit of a halt into the dollar's march higher. you can see this morning that the dollar was stronger against the euro. dollars down against the yen but that fomc meeting will determine whether the green back heads from here. if you want to check out what's been happening with gold prices at this morning you'll see they down slightly. right now back to the story of the morning apple shares soaring. brian blair joins us with his analysis. >> it was definitely driven by the iphone and the big story is not that it's just sold well in the u.s. but outside of the u.s. it's a blockbuster product. they highlighted china, significant grower of revenues. but china has really taken off.

asia grabbed ahold of this iphone 6 and are driving strong units. >> tim cook talked about new buyers coming into this people in china and beyond but he also said they have been stealing market share from android and seemed to be gleeful about that. should we look to numbers from the other phone makers to be weaker this time around? >> we should. samsung dropped off. the back half of last year was tough for them. that was because of competition from lower end chinese hand set makers but we should expect to see market share decline this year. apple will have another strong march quarter. that's one of the things we're seeing today and that will continue to some degree for the rest of the year but that share will come from somewhere and it needs to come from android. >> when you say you're thinking the next quarter is going to be good. >> yes. >> there's a huge upgrade cycle and we had the change in size of the screens but after everybody gets the new screen size then what? >> that will be the big question

this coming fall. only a fraction of this is upgraded to the iphone 6. >> do you worry that it could turn into the ipad in that it became so good that people decided it wasn't something they needed to upgrade every year or every two years. it's just i'm going to have my ipad every three years. >> we're running into the law of large numbers here. 74 million units is astounding. they're approaching 100. the difference is these are high quality phones. at some point that will be the argument. but there's a if you geographyies where smartphone penetration is still low. india, most of them are on feature phones. -still places in the world where apple can see growth but we're getting close to that argument. >> i know we have that in april.

>> yeah. >> do you have any hope we're going to get some other blockbuster device? >> the next product beyond the watch is going to be a television but probably not until 2017 or 2018. the watch is still a big variable. we think they're making 13 to 15 million units this year. it's a big number but not as big as some of the estimates out will. there's no killer app for it yet so nobody knows howell it's going to do. >> you should talk to me. everything should be high def and you don't need a universal remote. you know exactly how it works, ease of use because that will -- i have things now. i have applications i have netflix. everything takes along time. >> the cable interfaces are still horrible. they're not easy. there's nothing intuitive about them. and while a lot of people including myself thought we

would have seen it by now. >> i know exactly what it should do and they will rule the world if they make that thing. >> we use apple tv for so much tv watching. hbo, show time. >> wait until hbo goes on stand alone and you don't need to have a cable subscription and then everybody will just use apple tv. >> it's doing pretty well. it's an amazing thing. >> i don't need apple tv because the new samsungs have all of that stuff on it. >> but it's a little slow. >> it's a little slow on the samsungs if apple did it integrated into a thin tv it would be amazing. >> you should be able to get into your tv and it should be driverless and take you where ever you want to go. it should be electric and the battery should go 1,000 miles. >> let me ask you, $365 million market cap for this company stock now looks like it's at $116 up from 109 yesterday.

do you buy here? >> you do. there's still upside from here. that comes from the march quarter is going to be a follow on monster quarter on top of december. it's not going to be as big from a unit perspective but the analysts are going to get march quarter wrong. >> and the price starts to make you nervous. >> 130 plus we'll see when we get there but that's where i think we're going. >> you saw earnings per share went from $2 to $3. why? because of the buy back. they retired a lot of stock. >> that's what you do when you have that cash on your hands and pressing the earns for share which makes the multiple cheaper. >> if it's all working, do it. >> the blockbuster buy back. >> $180 million in cash. >> that's right. >> thank you, brian. >> design that tv. but they haven't called.

i did get a christmas card. it didn't say anything on it. earnings season is in full swing. many of the multinationals posted less than stellar results and talking about a strong dollar. joining us now is the ceo of the earnings scout. we had a long discussion on this yesterday saying it's almost like a one time event. currencies are going to fluctuate. birds are going to fly. fish are going to swim. it shouldn't go into your long-term thinking of whether to buy the stock or not. >> that's true. when we aggregate the data up we tend to find we know it's going to impact multinational profits in the u.s. we know it impacts global trade but because most companies hedge it tends to be overhyped and doesn't have as material impact on earnings. but if a company isn't hedged right it can be damaging but

when you ago rekbatgregate the numbers it's overblown at this point. we're worried about the drop in oil prices instead. that's much more impactful at this point. >> for groups dependent on oil prices? >> absolutely. and you're seeing the worst revisions in the s&p 500 right now. the top ten worst are all energy companies and if you take the top 50 worst earnings revisions right now in the s&p 500, 75% of them are from the energy space. so it's going to be quite devastating for profits and expectations for profits for the energy companies in 2015 and into 2016. >> maybe we did miscalculate because -- who was that? look around? anyone hurt? no you all right? >> we're all standing here. >> they know you're on tv don't they? this is the biggest opportunity of your life nick. some guy is throwing chairs around. have we gotten to the point now where we say, wow, maybe all in.

maybe the oil thing. maybe it is negative. because if it strengthens the dollar and hurts all the multinationals and a big part of the s&p is dependent on oil prices being higher the people that benefit and that is with input cost and consumers maybe we offset the benefits in terms of the s&p. >> there are going to be some big winners from the fall in crude. look at the airlines. earnings are going up. delta is going to save $500 million alone in the first quarter. what we're seeing is the ago refwatre -- numbers for energy. it's not being met with an equal rise of the dollar. it's dragging down the overall numbers and the declines we're seeing nernings estimates for the energy sector has v been the

worst we've seen for any sector since the financial crisis of 2008. it's the magnitude downward that's been the devastating impact. i appreciate it. just remind me that we're going down today because airlines didn't do anything in their corporate planning to see oil prices go down yet they're going to have the windfall profits because of the price of a commodity going down. there should be a way of sequestering those profits as well and chuck is looking at something right now. >> actually he is. >> i know he is. >> we don't know if you're being sarcastic. >> i'm being real. you believe this. you believe that airlines are making too much money right now because it had nothing to do with the oil price decline. here they are, raking in this law. you might write a legislation that they upgrade every kaplane

with a new cabin. >> richard just e-mailed those. >> i'd rather be with the screaming brats and liberal market strategists. that was a good one. think he's watching? >> showing your true colors. when we return yahoo! shares jumping on the company's plans to spin off it's yahoo! stake but the question is whether this could make marissa mayer's job harder. we'll explain when we come back. financial noise financial noise financial noise

welcome back to "squawk box" yahoo! planning a tax free spin off of its stake in alibaba. that investment valued at 40 beside. shares getting a huge pop on that news. here to take us inside yahoo!'s plan is victor anthony and

manager director. good morning to you. >> good morning. >> we expected this sort of. >> yes, i think there was some apre aprehension so that's what you're seeing with the share price reaction. >> i made the case this is the right thing and courageous thing to do for shareholders. are you in the same place? >> i am. she shared shareholders roughly $16 billion worth of taxes. can't ask for anything more. >> starboard might be able to ask her for a little bit more. they wanted yahoo! japan to be part of this. >> yeah they hinlted on the call last night that maybe that's in the future. >> why do you think it didn't happen this time? >> there's licensing deals with yahoo! japan that makes it more complicated. >> when you now look at yahoo!

on its own what do you think about the business? >> there's not much to be excited about it. the guidance for the first quarter was week however number one i think next month there's tun for them to rework the microsoft search deal and extract some better economics out of that or potentially shift over to google. there's a holy grail in may when they could potentially win away from google as well. >> she mentioned that on the call. do you think she has a chance? >> she talked about it and seemed enthusiastic so i'm sure they're working with apple. that could add to significant market share. >> how do we judge her tenure so far. she has done all of the right things when it comes to alibaba and the question is how do you judge the rest of it? >> well it's a difficult business. it's challenged from a secular

perspective. it's some what unwarranted. yahoo! has been through multiple different ceos sometime past. she has made the right moves and i'm excited about that one piece of the business. i think that could lead to some upside for yahoo! this year. >> as an investor what do you think? do you buy the shares now ahead of the spin? is that a bet on alibaba or her and correae yahoo!? >> right now i think the stock is mispriszced. i think 15% upside. >> thank you we appreciate it. >> thank you for coming in. >> when we come back today earnings dominating the market discussion in the united states

but greece is sending off warning flairs in europe. a sea of red out there. why u.s. investors need to take note after this. first take a look at yesterday's s&p 500 winners and losers. ♪

good morning and welcome back to "squawk box." futures are rebounding a little today. we were down 400 points yesterday. closed down just under 300. we're now up almost 50 points on the session. apple has a lot to do with changing the sentiment because it was across the board. across a lot of different industries yesterday combined with the ones from the night before and a lot of major names like microsoft and procter & gamble threw the markets for a loop yesterday based on the stronger dollar and the rest of the day i had cnbc on a little bit and i saw a lot of lower thirds. that's when we put print at the bottom asking a question will the fed be on pause now? a lot of people brought up what we were talking about. there will be people say look there's no inflation, it's not

going to hurt. things aren't that flush yet. there's no reason to be haesstey here. some think this is a good way to do things. >> that's why the market is going to be watching this fomc meeting. >> now they say so much is data dependent. are they talking about european data? >> the market will find something in it. >> they have no better idea than we did. we could make a better decision. >> they're biding time right now. >> we're ready to do qe. >> no no. >> anyway we are watching greek stocks in the bond market this morning. the market making waves and

rolling back privatization deals. michelle joins us on the squawk newsline. this is the beginning of what we heard. we were thinking he could get in. the new party. we'd hear a lot more moderate things. that has not been the case. >> that's why you're seeing so many signs within the greek financial market right now. to look at the three year yield it's approaching 17%. that is an astronomical move by any perspective. the bank stocks are getting pummeled again today. investors thought he would strike a more pragmatic tone and every move he has made has been antagonistic whether his financial policy or foreign policy. yesterday he criticized the eu for scolding russia. his first foreign meeting was

with the russian emotions bass dor. his very first act was to go to the site of a war memorial for vicks of the german nazis and that went over poorly in germany. they're going to likely reverse other privatizations as well. and he campaigned on loan forgiveness so the bankers tell us that people have stopped paying their mortgages and non-performing loans are finally started to improve. it's been a real reversal. people thought things would be better and we have to see where this goes. the finance minister was on cnbc and she's going to face down with the ecb and get them to cut what greece owes to them. it's going to be a show down but right now signs of financial stress in greek. >> we were looking by greek

banks and seeing what happens in yields. we see the pressure in greece. we see it spreading to other places. what does that mean? >> that's going to be important when negotiations happen because right now it's who is going to blink. the other side is terrified in greece exits or something happen and banks collapse it will be something like that but when you see the rest of the financial markets not reacting that will give the ecb, eu imf a lot of leverage. >> michelle do you think it was intentional -- would you really do that when you know you're dependent on getting the germans on boor for any concessions? that's a real thing to do.

do you know how that works? >> that's just about setting up his leftest credentials because most of it was made up of leftests. outside of greece it's read exactly how you read it joe. that's what he intended at this point and it would fit because every move he has made has been antagonistic at this point. >> right. >> we always assume we do that here. we assume politicians will go more to the center after an election and we know that done always work. i thought this guy would be conciliatory and what are the chances of the greek exit? is it below or above 50% now that he says we're out of here with the euro? >> look i think it's still below

50% because he has campaigned on not leaving the euro and the vast majority of the greek people overwhelmingly want to stay in the euro. this is a man that wants to be in power for a long time and have a bigger role in europe. what i think is a much higher probability is whether or not we start to see some kind of capital controls because there's a lot of stress on the banks. people aren't paying. people have told us they're doing this. push is going to come to shove and they'll have to make a decision how much leeway are they giving these banks to keep funding their collateral. >> leftest go left after an election typically. earnings driving the market story this week investors are now looking ahead to today's fed statement.

joining us is john silvia. there is. it said silva. i know that. i'm not feeling it today. anyway drw trading group. john we're asking percentage questions now. what are the chances at this point that the fed does not raise rates in 2015? what are the chances? >> probably 1 in 4. i think they'll raise the rates. 25%. i'm still in favor of raising the rates. a couple of things that are really key here is first for us the financial markets are getting some normalized pricing in the financial markets. i don't think inflation is a major issue. if you look at the data since 1994 the pce deflated the rate less than 2%.

i don't think trying to get it is the relevant target at this point in time. the economy has legs. it's strong enough. i do understand the dollar issues. that's what we'll be look for. emphasis on europe and the dollar. but for us it's only one in four chance they'll not raise rates. >> okay lou i think of you as a renaissance man watching all things. looking all over the place. yesterday, were you -- i mean scratching your head about some of what we saw? oil we already know is crazy. currencies and now these big multinationals, their earnings were bad and the forecast for 2015 is not for, you know 10% growth. many post revenues and earnings below last year. is that what the rip roaring economy produces? >> you think it is. or not a global economy in particular. a lot of the ones that have reported poorly have a lot of earnings from overseas. there was not only weakness in a

lot of economies overseas but there was also the stronger dollar and i don't know of any corporations. it's a rare corporation that hedges currency risk well. so we have fallen by 20% on the euro. it's fallen 20% or so versus the dollar and a lot of other currencies are weak versus the dollar so i think that's what played into it. as far as the stock market what are we? 3% from the high? i don't think we should be too concerned about that right now. i do think the data was very confusing though. yesterday was a good example. we had a very disappointing durable goods data and the transportation component of those for the last quarter of the year was minus average 1.1% so the thing that always bothered me ais the lack of personal consumption and that has a lot to do with wages and the jobs that have been created.

so the corporations have trouble with overseas. i can understand that. some of the ones having trouble here because the aggregate demand is better than it was. employment is higher than it was. the type of employment is not very good. wages are not very good so the growth rate is not particularly good. >> so quickly, every tom, dick and harry, that's a really old expression but every time they said 8 to 10% s&p gains for 2015 and a lot of them were using the s&p earnings game between 14 and 15 being around 8 to 10%. let's say it's flatter down because of oil -- that whole group oil probably won't be above and then the multi multinationals can we make it up somewhere else and still have the market move higher? even if earnings are flat for the year? >> i would think that multiples can expand when there's expectations of strong economic

growth in the future or stronger economic growth in the future to fuel more sales so we have the global economy is slow and slowing. the u.s. the fed is still -- i agree with john the fed still figures they're going to raise rates this year and the stock market has not acted very well when the fed is pulled back on the easy policy over the last few years. it's not all right so far. >> final thoughts john silvia -- i don't know if you juan to talk stock market? but talk about the economy -- this is not funny. is it going to be a 3.5 or 4% year? >> no absolutely not. a lot of people discounted real strong accelerating and economic growth in 2015.

they're not going to get it. >> 25% so rate cut. what is it 5%? we have another round of qe? what's the chances that happened. >> it's zero. >> i don't think anything in the world is zero. bullard didn't say zero. >> yeah well okay. he is from the fed. >> exactly. that is funny. now i'm laughing. all right. thanks john silvia. >> i wondered where that was. >> i didn't see it earlier. lou. i feel it now. >> when we come back alibaba under pressure in china today and it's all about fakes. we'll tell you about that story when squawk box returns in just a moment.

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we have been talking all

morning about yahoo!'s plans to spin off it's alibaba stake but they're in the headlines today nor a different reason. eunice joins us now from beijing and she's going to explain. eunice. >> hey guys we're seeing a very rare public dispute occurring between alibaba and the chinese authorities here over the authenticity of the goods it sells on its site. especially on its popular consumer to consumer site taobao. a very unusually strongly worded statement the state regulator said they found many of the products sold on the site were either substandard, violated trademarks or were just down right illegal and this comes days after the same agency issued another survey where they said out of the sample of goods they examined only 37% of them were authentic. now this is the first time that we're seeing open conflict between alibaba's sites as well as the chinese authorities.

taobao which is the popular site of alibaba actually posted an open letter where they were questioning the sampling and the methodology of the government authorities. the government shot back saying here's this white paper and criticizing alibaba's taobao for lax internal con rolls. taobao then issued another statement saying they themselves are a victim of a developing economy. they said they said fake goods are a tumor of economic development. we're willing to work with departments to get rid of this tumor. peter teal was on your show talking about it ahead of the ipo. one of his concerns was he was wary because he thought alibaba was a bet on chinese politics. >> all right.

eunice, thank you very much. when we come back this morning, president obama drops his proposal to tax 529 college saving plans after a public an political out cry. we have that story when "squawk box" comes right back.

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welcome back everybody. the obama administration is scrapping its proposal to the college plans. john covering the story from

washington, john this only rolled out last week in the state of the union address but the blowback was hard and swift. >> a pretty quick exploding cigar for the administration. it only raised $1 billion over ten years and it was creating a heck of a lot more than $1 billion worth of grief for the administration. you had republicans criticizing it from the outside as a tax increase. and democrats both in places like new york and california, where you have a lot of people -- high income people who think of themselves as middle class. high income by the american average who benefit from these plans who were complaining it was contrary to the administration's intention. it was trying to refocus money beginning people who make more to people who make less. nevertheless they decided that discretion was a better part of valor and they pulled it down yesterday. >> you know john, the thing is this is a good plan to

incentivize american families to take steps to make sure they're saving for college costs coming down the road that we know can be astronomical. this is something that you paid taxes on put it into one of these 529 accounts. the only benefit that you're getting that it earns over the life of the account is not going to get taxed. i can't believe this even mate its way into the state of the union address to begin with. >> well, the argument from the administration the benefits of those account which do have a virtuous purpose. i've got them. i assume you got them as well. pretty much everybody i know has these accounts. >> you know who else has them "the wall street journal" is reporting that president obama has them for his two hour daughters. >> absolutely. they put a bunch of money away in those accounts. but the argument is the tax benefits flow mostly to people who make well above the average income in this country. and the administration is

proposing a very expensive program to help people who make less. so part of paying that for that was to take from people who decided they needed it less to give it to people who needed more. that's what happens when you try to try to redistribute income and it's controversial. >> i always tack about the good mentions, you know we know where those lead. and where the path is paved to. i don't usually get you to agree with me on that. so i'm not going to say the administration is not well intentioned in a lot of these things. but i will tell you, when you've got a program where its benefit is to those people who are paying taxes, so the benefit to them is that they might pay less taxes, that hasn't been the primary group of people that this administration worries about. most of the benefits are going to people who either get rebates or don't pay any taxes at all. so it just seemed like a no-brainer that this administration would say this is benefitting people who are in

an income people to people who actually pay taxes. most of what we do food stamps disability, all of those things are people in the lower 50% of the payoff that pay no taxing whatsoever. and that's a cynical way for me to look at this this program doesn't pass the test for redistribution. it seems to be everything that this administration is interested in that. >> john -- >> are you going to let hill answer that? >> i think he's going to disagree with you. >> first of all, there's nobody that you're talking about that don't pay taxes. they may owe federal income taxes. >> when they buy a pack of gum, they pay sales tax, john? >> yes, yes. >> all right. >> i wonder who you're going to blame, obama or an actual person in his office who had this bright idea? >> well, it was a political miss calculation by somebody who decided to pay for the program. >> what's that person's name? >> i don't know.

i lot of people working on the budget. >> joe's point is a valid point. but the matter where you drought line. >> all right. >> we'll explain this out. when we come back we'll talk about apple shares soaring. we've got liberty media ceo greg mcfay who is going to join us on the "squawk" set in just a moment.

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yahoo! bringing up its stake in alibaba. we'll talk it over with liberty media power player greg maffei. and big multinationals. plus dow component boeing set to release the numbers just ahead. and we'll tell you where one of the super bowl's biggest characters is putting millions of dollars, seahawks star

richard sherman, on the stock market. as the second hour of "squawk box" begins right now. ♪ good morning. oh. welcome back to "squawk box" here on cnbc. first in business worldwide i'm joe kernin along with becky quick and andrew ross sorkin. we're watching the futures after yesterday's market drubbing which the dow was down 400 points. it wasn't it six months ago, we said do the math do the swing at 17,000 you'll see this more often. you'll probably get used to them and then get the 850 or 900 points. among the top stories, apple crushing estimates for the first quarter. the company posting a profit of $18 billion. that's right $18 billion in one

quarter. that is the largest in corporate history. in the meantime yahoo! answering now it will spin spin offits stake. that results in $40 billion. domenicanenic chu join us. >> they looked at the data for apple's blowup earnings reports. what we looked at the times in the past 20 years where apple has beat consensus earns per share estimates by at least 20%. it's only happened three times in the last 20 years excluding what happened yesterday. we'll just look at those three samples here. apple stock has been positive the day after every single time. so if you had had bought apple shares at yesterday lows close going into the number and you got this kind of report those shares rose. and it also rose five trading days later as well. pretty decent for apple.

if you're an apple bull this might be the time to say, the history that we had for the last 12 years shows apple does well. $178 billion in cash that's a huge number. we know that's a lot of cash. but just to put it in perspective begin the $178 billion that apple has in cash and short-term investments that's bigger than the market values of at&t worth $170 billion. and also bank of america at $164 billion. and disney at 159. apple's cass hoard can buy each of one of these companies. with yahoo! to put it in perspective, 340 alibaba shares. and around $40 billion. ia ha's market value, entering yesterday's close was $46 billion. so, again, a lot of value at yahoo! we know this has been placed in that alibaba stake. and today, we'll find out how much they want to put in that

business, the value of the business overall. back to you guys. >> dom, thank you. let's bring in the guest host for the next two hours, greg maffei is president and ceo of liberty interactive and also president and ceo of liberty media and broadband. vup a lot of titles. >> we keep generates a lot of companies. >> a lot of companies. >> greg and john malone have created a massive empire if you will. we were just talking about yahoo!. there's a hundred things to talk about. i think want to talk about the economy and media at large. in yahoo! in particular how do you judge marissa mayer and what she has done. i had argued in the last hour actually spinning this off the way she has, actually a pretty brave thing to do. it's going to expose yahoo! for whatever it is going to be but

there has been a credit seek of the sale of alibaba which was a tax event? >> so i think spinning it is the right thing. and she did the right thing. the prior taxable sale was a horrible transaction. the original by jerry yang one of the all-time great deals. the briggs before marissa mayer and this team got there to sell half of it early to reduce their leverage was a terrible deal. but this deal makes sense, you know one that we would entirely endorse at liberty. we've done a few transactions like this along the way. >> how do you measure her success thus far? >> i think a work in progress right? >> a work in progress? >> yeah. i mean this was -- had to do thing. it was almost inevitable i think. it was the right thing to do when she did. -t. and the transformation of the business where she's investing in, mobile primarily. trying to move from display and native ads and the like. i think that's a work in progress.

>> are you a believer though yahoo! unto itself can come back to where it is today? >> we'll see, there are companies that have been successful in reinvigorating themselves. one of the great examples was priceline. priceline might as well been dead. amazon was knocked down. >> you don't think it's a company that has to sale starboard, one of the activists going after yahoo! wants this company to be merged. does that make sense to you? >> i don't know about the particulars of merging with aol. we'll see if she gets time for it. people pushed for the sally of alibaba turned out to be wrong. it turned out to be entirely the wrong decision. we'll see whether pushing her now, the whole team marissa is the right thing. >> i want to talk to you about media and it's gone with

consolidation. but because we had a terrible earnings day a day ago and new earnings numbers that are better what is your broad thought on where we are? >> if you look at our business some of them more domestic-focused like sirius xm and charter cable are doing really well. the u.s. portion of our businesses like qvc are doing very well. overseas, we're challenged simply by the fact you're translating back into u.s. dollars. if the euro was 135, 132, and we're bringing thing thing back at 112. we had a billion-dollar business in japan and a billion-dollar business in germany with qvc four years ago. you're treading water. if you look at modest levels of growth you're treading water backwards in u.s. dollars. not necessarily local, but u.s. dollars. >> but that strend going to be reversed sometime soon possibly? >> i'm not a currency trader. a lot of people predicting it's

going to go. >> you know with that currency of business you made less money? your companies are worth less? >> we report in u.s. dollars. we pay, you know our shareholders measure in u.s. dollars. in our case the interests are in u.s. dollars. dollars are what we trade in. >> this is why we pay our u.s. secretary tore always say dollars. it's a tough argument to make for a company? >> that's right, one of the things that can be a stimulus for the european as well. a weak you're -- >> that's the only way qe would over there. a weakened currency. obviously, you can't drive rates lower. >> well, the other thing they're going to get is some boost from oil. we have a one hand giveth and a one hand taketh. >> it's crazy, though the

weakened euro. in germany, the currency is weaker -- they don't deserve -- they deserve a swiss franc. the whole thing it's jerry-rigged. >> i want to talk about media consolidation. we'll set this conversation for later. we had your colleague mike on the show. >> yes. >> just handicap for us how you think the regulatory environment is going to treat time warner cable, comcast, at&t directv. and what that bodes for consolidation thereafter? >> my bet would be that all of those deals get done. that what is the set of regulations or restrictions around them and what do the acquiring companies have to agree to that will be the rub. >> and then there is a domino effect affords it.

you and john have a three-dimensional chess. >> charter has been an acquirer. it's going to continue to be an acquirer. i think to the tree that comcast completes the time warner transaction, that's probably the last acquisition of systems that they'll be able to do for a while. so that probably sets up pretty well for charter. >> and then the content becomes the big -- >> can i -- i didn't get -- we just jumped in. i didn't get to the introduction. i brought you guys a present. >> you brought us a present? >> i did. you guys now that you moved to new york i don't want you to forget your humble roots. do you recognize this? >> i used to go over this every morning. >> i still go over this every morning. >> we'll never forget this. >> i was actually lucky enough to have breakfast with governor chris christie. and i asked him to write a note to you guys unfortunately, the snow or the fear of putting it near the bridge the note didn't

get here. he was telling me he'd be more than happy to give you guys an escort through the lincoln tunnel. this is to remember your roots. >> thank you. >> that's a beautiful picture. >> it is beautiful. >> greg stick around. we've got a lot more to talk about. we appreciate this very much. we'll talk a lot of things. you know yesterday, you remember my prediction was that this storm is not going to go unnoticed. the complete lack thereof. and i just want to say the tabloids would be all over it. but there is news -- the biggest tabloid, "the new york times," actually, right here "leaders defend shutdown for a blizzard that wasn't." it's weird because it was a blizzard. >> it barely missed new york. >> they're still mad -- >> and "the new york times" are in your -- >> yeah thank you. they do. this is funny because i watched some of the weathermen

yesterday. i love janice i was watching this guy sodino every time they tossed it he was, it was a big storm. just about 20 miles. his teeth were gritted. it's a weatherman. they used the u.s. model instead of the noble warming euro model. anyway. i want to say is that right -- >> he needs a new model. we're just minutes away from the results of boeing. it's called something for a reason. most even aren't alive when one happens. it's not every week we get that. the impact on the plunging oil prices and the strong bottom line. stick around, we'll have that. s aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.

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welcome back to "squawk box," everybody. we've been watching the futures this morning, after a big down from yesterday's markets you see some recovery yesterday. although you have to know at some point yesterday we were down. we see a gain of 50 points with the dow futures. s&p by 11 points nasdaq up by 60. news from soon to be public restaurant chain shake shack,

andrew now expected to sell 5.16 million shares. at $17 a share. previously it said it would sell 15 million shares. you guys eat there frequently. >> we did, but henry was up with a little bit of a stomach. >> i was up all night. >> anyway we are less than 15 minutes away from the release of boeing's results. 24 how, caterpillar helped spark a selloff after blaming plunging oil prices in a less than stellar report. should should investors expect more crude and currency payment ahead. joining us to weigh in is rebecca patterson, a cnbc contribute. and mike anderson at ubs strategy. guys, good to see both of you. rebecca, were you worried at some point the strong earnings were going to turn around and

bite us in the rear. it did yesterday. >> yeah we're going to see more of this in the next quarter. and we might see in the next quarterly earnings. but i don't think this is say story we're going to see on and on. for three reasons. briefly, i don't think the dollar falls at this speed. pardon me, euro yes. early morning. the dollar doesn't rise at this fee. secondly, corporations hedge dynamically. they're not immune but taking steps in the last few months to try to protect themselves more. and finally, we're seeing early signs, i don't want to celebrate, out early signs that foreign currency starting to see a little more demand. >> did you hear us yesterday? >> i watched a lot of your show. i was hoping to get here. >> we talked about giving you kudos. but what you actually said it wouldn't be this soon for the dollar and there would be political ramifications with

protectionism that happens towards the end of the year. >> and i still worry about that. >> now you're taking it back? >> no i think the politics and corporate issues they're going to last but not as bad and as shocks as they've been yesterday. that was a biggy yesterday. >> procter & gamble was warning for the rest of the year. it's only january. >> manage expectations lower, if the dollar keeps rising -- >> i like this optimism? >> i think this is going to be a good year for the u.s. economy. i think it's going to be a better year for the global economy. i think it's all in the timing. oil and the dollar these things are going to feed through over time. we're just not there yet. >> mike let me ask you, if we're looking atough times for currency. if we're looking at concerns with were what's happening with oil and currency across the board kind of getting hit, what does it all add up to for the fed? how do they look at this? >> and does it make it tougher

to raise rates? >> yeah i think it does. i think the fed is caught right now in a little bit of a trap in that they are in the process of resetting rates. i think the first thing, let's focus on the pace. there's two things that they're really wrestling with. the first is this issue about employment markets. we're talking about returning to full employment. but perhaps perhaps the more important issue is we've had virtually no wage growth and target inflation running well below what the feds are looking to do in terms of their targets. to me you have to look at what the fed is going to focus more intently on i it's an inflation issue. rather than unemployment headlines. when the fed makes this decision i think they're going to be very pragmatic and i think they're going to defer the rate hikes. i think if anything those who are looking for midyear hikes by the fed, we could wind up seeing that stretch from the third quarter even the fourth quarter. >> third quarter, even the fourth quarter but definitely coming this year? >> nothing is definitely becky.

if we see the europe people economies that rebecca just talked about if it doesn't gain like we're expecting, if we see the fact that the inflation expectations don't continue to rise at some point. i think there's a point where the fed says we'll wait until 2016. however, i do think the fed has to be careful about eventually resetting the poems and the notion that you just keep zero rate i don't think that's what the fed wants to do. >> so rebecca, what are talking of doing right now? >> we're still overrate equities. we're overrate u.s. equities. we do have quite a bit of exposure. we have exposure in europe we have exposure overseas and we're just hedging wherever we can. and so we're taking the currency part out of it. if you take the currency part of it european stocks are outperforming stocks. >> you can't take the currency out of a u.s. investor who is coming back in. >> sure you can.

well, if you are a u.s. investor looking overseas our clients we're going to buy the stocks and take out forward positions to take out recurcurrency. you need to take etfs out. >> the market is going to be watch the foc statement very closely. looking for any sign a change in course. what do you think that's going to be in there? or how does the fed actually play this to keep the markets from walking away that things have changed? >> first all, i think they're going to maintain that patience. they're not going to anything in my opinion that's going to reset the expectations with regard to when they start raising rates, say, given it's the middle of the year. if they do it they're doing it at the next meeting. don't expect to see a whole lot in the changing of the statement. the one thing, rebecca and i were talking about this before we came on board -- >> conspiring?

>> comparing notes. comparing note. >> you don't want to share -- >> i'll share it with you no. the one thing we talked about here is the fact what you could wind up seeing perhaps this de facto tightening in the u.s. because of the stronger dollar that could give pause to the fed a bit. so it may make a statement to the fact the easing of the tightening of the global because of the stronger dollar that's it. >> we've got to go. do you think the s&p grows between 13 and 15 earnings with the oil and the dollar do we get up instead of farther down yes or no? >> in the course of the shares? >> yes. >> up marginally. up single difficult but up. >> in real current raens, do we have earnings growth in 2015 jp. >> we're looking at 6% to 8% earnings. >> you haven't changed that? >> i'll a little more negative.

you think all year you're going to see these guys comping an entire year fx. it's a big problem. to get in the way of the fourth quarter, precipitously, it's going to be all year. >> but the euro is not going to fall against the dollar 8% for each three weeks to the end of the year. >> i understand. but if you're reporting in u.s. dollars you're reporting against the 132 or 135 from last year and it's 112. that's a problem. >> mike thank you. coming up next super bowl stars speaking out seattle seahawks star richard sherman signed a four-year $56 million contract before the season. we're going to tell where you he's investing his money when "squawk box" returns in a moment. >> announcer: time now for today's aflac trivia question how many times has the s&p 500 closed at a new all-time high since 1928? the answer when cnbc "squawk box" continues.

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when my teeth are ready? [girl] can it tell the doctor how long i have to wear this thing? [man] can it tell the flight attendant to please not wake me this time? the answer is yes, it can. so, the question your customers are really asking is can your business deliver? >> announcer: now the answer to today's aflac trivia question. how many times has the s&p 500 closed at a new all-time high since 1928? the answer -- 1,024 times.

or 4.78% of all trading days. coming up when we return dow component boeing with the quarter, after multinational blue chips got crushed yesterday. ahead of the break, we take a look at u.s. futures at this hour. we're seeing a little bit -- the 40 points nasdaq s&p 500 up about 10 points. we're back in just a moment.

welcome back to "squawk box," everybody. we have dow component boeing out with quartering results. let's get to phil lebeau with the numbers. >> becky, this is a big one for boeing. earning $2.41 a share. the estimate on the street $2.11 a share. revenue better than expected coming in at $24.5 billion. that's 600 million that's better than what the analysts were

expecting. full year revenue, as well as earning, at record revenue, 90.8 billion. that's for all of 2014. let's talk about what people are focused on for boeing. that's the guidance for 2015. they're expecting to earn between $8.20 and $8.40 a share. that's a little light of the street estimates. very typical of boeing as they come in on a cautious guidance. as the year goes on it starts to increase with revenue of another.5 and $96.5 billion. commercial airline deliveries of 750 and 755 this year. this year they delivered 723. operating cash flow came in at $5 billion. remember, that's been a focus for any number of analysts as far as how they can increase the cash flow. the guidance for operating cash flow for 2015 at least $9 billion with a free cash flow of

$6.2 billion. again, for the fourth quarter beating the street hand lid earns $2.41 a share. guys back to you. >> watching that stock right now trading higher dow compoent that closed at 2.48 now at $156.50. >> they say anything about currency? >> they have not, joe. i have not heard anything about currency. that's going to be a focus. their conference call is coming up within the next half hour. so far have not seen anything on currency. >> didn't hurt them. among the other stories that we're going to tell you about, phil, thank you again. nintendo saying it won't make it's annual profit target. the video game maker blaming slack sales of its 3 "dancing" consoles. and blocking personal wi-fi access to hot spots the agency said the move is illegal and could lead to heavy fines. and also realtime video ads for

the first time during the super bowl targeting people based on what they're talking about. now the social networking giant is trying to compete with twitter. we'll see if other people will sit with their second screen with twitter. >> people are trying to do that with sports. ghost busters is back. the all female reboot its lead casts. "bridesmaids" director paul fig tweeted a picture, kristen wiig melissa mccarthy. she's reportedly signed on. and expected to begin, the special effects should be miles ahead of where they are. >> that's good. the green slime. i would hope that -- >> i would hope -- i don't know bill murray has gotten too big for his britches. >> i hope it makes it. >> some type of cameo.

>> at least. that word is nice but does boeing do that in dollars like oil? >> it wouldn't matter. >> it wouldn't matter on demand. that's the affected price but you wouldn't have the currency. >> i don't know the answer to that. but i think a lot of international things -- >> because, we think of it as our greatest -- our greatest manufacturing exporter. but they wouldn't do it in a way - what's the greatest export state in the nation? washington state. because of microsoft. >> microsoft is currency right? >> big currency. we used to hedge out a quarter so we can make earnings estimates for a quarter. >> but it's much more expensive if you do it for a quarter. it's not that expensive. but long-dated call options are expensive. >> i was looking through that and i don't see a comment about

currency. >> i don't know just priced in dollars -- >> they'd have to mention if as much as they sell -- they've made a lot of -- the real growth is coming from all of those other places. >> and the context that we talked about with the wi-fi, there's a big case marriott was trying to block people at their hotels from using wi-fi that wasn't their own. >> right, right. >> and so that's what that story is about. it's kind of remarkable that they can even trying to do that. >> they were claiming it was for safety issues. >> right. >> but the skeptics a lot of us thought really it was just trying to plake sure you can get people for that extra amount that you're going to hit them with. >> you've got young children in first class and free wi-fi at hotels. those are one and two. >> it's unbelievable. >> i don't know cheaper hotels give free wi-fi. and the more expensive -- >> this is what you've said. this is what you've always said.

you've been right all along. and why if you pay for first class do you got to listen to screaming kids. >> more people are coming around to this way of thinking. continuing our earnings discussion, let's get a check on mike, i'm kind of glad you're here -- not that i'm not always -- >> s&p capital -- >> thank you. good morning. >> you have a number for s&p earnings growth 2015 year versus 2014. what is it? has it come down? do you need to bring it down will it be affecteded by oil with that group and will it be affected by currency? >> those two factors plus you know, the issues with the eurozone. plus the fear of the exotic -- >> is a drum roll right now? >> a quarter, we're already down under 2% for the next. >> where were you six months ago? >> down 7%.

>> down from 7 to 2. >> a years ago we were in double digits. >> a year ago you were in double digitses? >> yeah. we're collecting all the information from the analysts and the analysts would say we're not getting a lot of great intelligence from the corporation because i think visibility is very opaque right now. i think the analysts are behind right now, but i think things have happened so quickly. remember analysts are analysts they cover stocks. they're not strategists. who would have seen this exes soggenous like shots. we talk about hedging, everybody has a different practice. some guys like apple get around it because they've had structural accounting. >> is that why the analysts cannot figure out what's happening when you have massive volatility in markets. you can expect the analysts to be off and see the type of

missesmiss s misses we've been seeing this week? >> yeah they really don't. >> second quarter? >> second quarter, it's even worse. under 1%. >> third quarter? >> right now, we're under 4%. so joe, here's what's going on -- >> year and year s&p earnings for 2015 5%. >>. >> yes, 4.5%. >> positive? >> positive now, joe. look, here's what you haven't seen. we do see the energy sector and those materials getting punished already in the analysts a expectations, right. what we haven't seen what the ceo of procter & gamble referred to yesterday, hey, look we should get something from the consumers out of this but we haven't seen anything on the uptick there. so, look people are trying to put a reason why the market is going on. let's just take it up a notch and get wind of history here. the s&p 500 since 1980 generates about 7% earnings growth. it trades around 15 times next year's.

here's the problem. right now, we're looking at a year where you might end up with, like 5% earnings growth if it's pretty decent and yet, we're currently trading at 16.6 times next year's earnings. now, that's really the bad news. this doesn't look like earnings is going to be able to make the case for a higher valuation. maybe something else will. and that something else will be that, well everything is relative. and if the rest of the world look really really bad and the dollar is where you want to be -- >> and if the interest rates don't go up the multiple could expand. and people say interest rate goes up for a good reason and the multiple expands. we could get growth because inflation. there's still a goldilocks scenario to come up with this. we could go 20 times based on secular lower low-term limits? >> where do you want to put your money?

in eurozone? china? >> me, i like liberty. every timedime goes in liberty. >> basically. >> you asked me a question i answered you. >> comcast -- >> right. >> right, right. you know i'm glad to see you, everybody laughed like it was a back hand complement. >> because you said i'm glad to see you "this time." >> this time? is that what it was? >> yes. >> thanks for that. >>. >> caller: that >> thanks mike. the two most important words for tech investors may be mobile and china. we'll talk about that when we return. plus arizona senator john mccain is waiting in the wings. he's just back from saudi arabia. the latest on the trip and the state of affairs in the middle east when "squawk box" returns

in a moment.

welcome back to "squawk box." this morning as a venture capitalist, our next guest has a number of startups over the last couple decades, mysmythe

juniper, just to name a few. a $3 billion company. a friend of our guest greg maffei and you have woken up early this morning. thanks for joining us. >> hi, greg. >> i don't know if you've seen it the cover of "fortune" magazine has a big unicorn on the cover. it's called the age of the unicorn. it talks about how there are now 80 companies in silicon valley startsups worth $1 billion. the article at least implies not so subtly that we're out of top. where are you? >> what's happening in the venture capital business and the private markets is really an aftershock of what happens in the public markets. i think there are really two big things going on there. the first is the rise of the mega cap. and the second is the emergence of the china ipo. first, let's talk about the rise

in the mega cap. when you look at the top tech companies, five of the ten were not publicly traded companies five years ago. and so you've had this massive rise in these mega cap companies that are worth an enormous amount of money which is motivating and inspiring the young entrepreneurs that are out there today, as well as giving these companies the currency to make the next oculus acquisition or whatsapp acquisition of $19 billion. and that trickles down all the way to startup companies. the second thing of the china ip is the china ipo. when you look at the top internet companies three of the top ten are china companies with alibaba being the most volatile. and alibaba is worth more than facebook. that's going to have a phenomenal impact because those are global platforms for our company. so one question we might have is

why is this happening? well i think there are two main factors going on why that's happening. the first is the technology business is just on fire. we're in a replacement cycle for existing technology that has two main drivers. the first is web to mobile. and the second is the move from on premise data center the cloud. >> right. >> and web to mobile that is an enormous transition. we think that market is ten times as good as -- geoff -- >> ning are we in? the moment if you will how long will these last the real valuations how many -- is this 1999 or is this 1994? >> well i mean i think this is a decade-long transition. because that replacement cycle and then the whole new business of moving offline to online that's disrupting major markets that have never been able to

address before which are massive markets, i think we're really in the early parts of that. now, there's no question valuations are high. they're in nose bleed territory. you know you're talking about -- sorry, yeah? >> geoff, this is greg you know you have been an investor in disruptive online companies, media companies like netflix and some others like these ncns. >> right. >> what's your thesis on mcns -- >> what's an mcn? >> i was going to let the smart guest tell us. what's an mcn, what's your thesis? how do you think this plays out? >> on the mcn, an mcn is a multichannel network. the whole thing, over-the-top content that sit on top of digital platforms like youtube. and the whole thesis is when you have next generation global video networks that you're going to develop new content, much like the new cable content that

are formed when the cable industry grew up. we invested in cases like tace made there are mobile networks. tace makers were -- can share and discover new contact on top of these platforms. right now, the biggest platform is youtube. >> is that going to change? is youtube going to own this? google google's going to own another platform? or do some of the other ones like amazon going to challenge it? >> i think there are others that will challenge it. primarily, viewing is going on on youtube. facebook you can't count facebook out. they're now serving 1 billion users a day. you got amazon and startups like vessel coming in. >> geoff, where does that leave the traditional player like greg or frankly like comcast or nbc?

>> with tacemade -- >> trying to play. geoff? >> well i think that's an interesting question up to now, people have viewed them as very distinctive separate traditional media versus new media. i think you're going to see much more crossover, and a much more coordinated effort between the two. i think you'll see partnerships. you're already seeing some of the traditionial media companies coming in acquiring some of these partners many disney acquisition maker studios, one example, a&e network going in and tacking up major space. you're seeing activity on space right now. >> geoff, do you want to get in on a golf course -- >> we got to go. >> is golfing healthy, geoff? >> well you know i think when

you talk about golfing, i think golfing is doing better. if you look at viewership the pga tour their ratings are on fire. the pga championship had the highest ratings in nearly a decade. you've got new young players like jordan spieth and rory mcelrey. you've got the veterans leak tiger and phil. you've got the people who have been around that everybody loves like adam scott and bubba. the lpga is doing much better with stars like michelle wie. >> it's just great, geoff. to play around it's just hard -- >> no you're right. if you look at equipment sales are slightly better. but participation is about flat. there are about as many people exiting games as there are entering the game. we've got increase the participation over the short term. it's about bringing more people back to the game and getting more women to play. i think a lot of things we got

to do is change the definition of what is golf. it doesn't have to be a long 18-hole round where everybody is grinding away. golf should be fun. there could be nine holes, six holes. >> it will never be fun. it will never -- >> it's a grinding -- >> it will never be fun. >> thank you, geoff. >> thank you. >> thanks for joining us. >> geoff, come on by if you ever make to the east coast. >>et didding up early, thank you. coming up it's only a matter of time -- you're going to embarrass yourself -- we're watching shares of boeing. the company reporting minutes ago. we'll dig through the results with analysts as we head to the break. checking in with equity futures as they had bounce back a little bit today.

welcome back everybody. boeing reporting quarterly results just a moment ago. posting a bead on the top and bottom lines. guidance comes in on the lighter side. joining us on the "squawk" news line is howard lobell. howard, tell us about this this was slower than people expected why is that? >> currency doesn't butter boeing, they sell in dollars.

the strength is deliveries it looks like a little bit of pricing. frankly, the outlook is a little stronger for aircraft deliveries. we were looking for 750. at the high-end. they're a little above that. and revenues a little above that. >> what does that tell you, a slower than usual growing economy? >> well they did a better job than airbus they should do that again this year. and probably into 2016. so its backlog, it's market position, it's product. a number of things. >> when we talked to caterpillar yesterday. we heard about a lot of problems they're facing. part of that is the dollar but also weaker comphoumodities. we talked to the ceo of cater pillar he said it's more

fragile and they're having problems. how does he see it and how is boeing soaring over the top? >> well a couple things one is get on an airplane, you're sitting next to anybody and everybody. there's not a lot of room there's pent-up demand for that. lower fuel prices translate into greater income for people who want to fly. and lower cost airlines which in some places will stimulate lower fares in some markets. there's some virtual good things that are happening, as opposed to all sorts of worry. >> society stock's at 137. do you buy it here howard? >> absolutely. i think our price target at 165 still goes higher. and i think that the other story we'll see unfold this year is how successful boeing is at getting more and more people to fly the driem liner.eamliner. >> thanks, howard. the blue chip is taking a hit dragging down the dow nearly

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i'm going to answer with the same answer, so y'all can shoot, if y'all please. >> mr. lynch, beast mode should investors buy the stock. >> i'm here. >> mr. beast mode big names like caterpillar are being heard. will the strong dollar sway the fed? >> i'm here so i don't get fined. >> mr. lynch, can you tell me who should run for president in 2016? >> i'm here so i won't get fine. >> what about tax reform? >> i'm here so i won't get fined. >> do you have a view? >> i'm here so i won't get fined. and what do you think of senator mccain? >> i'm here so i won't get fined.

>> it's good thing swx"squawk box" is on the air to get us the answers from the question. >> announcer: live from the most powerful city in the world, this is "squawk box." >> welcome back to "squawk box" right here on cnbc. first business worldwide. i'm andrew ross sorkin along with joe and becky. and in the super bowl media day, lynch gave media very little. it would be that lynch would pace up to $500,000 in fines if he refused to participate in the day. >> what a good team player huh? >> skittles. >> skittles. >> he could have played along. >> i was being facetious, skittles. here's what's happening this hour. mortgage applications dropping 3% in the last week. that happened as rates tipped up

slightly. the fed will be wrapping up a two-day policy meeting this afternoon. a statement is due at 2:00 p.m. eastern time. and. president obama is scrapping his plan to tax 529 savings. there are plenty of other ways to raise revenue as far as the budget. this only raised the a billion dollars over the course of ten years. we say bravo for pulling that. and stocks stronger than expected. in the full earnings forecast boeing for next year it falls for consensus. apple posting the largest profit in corporate history in any company. $18 billion we used to talk about exxon and get robbed by $10 billion. but $18 billion, quickly do the math, 80%. the results blowing away even those estimates, we'll talk to an analyst in just a moment.

yahoo! is spinning off tax-free it's 15% tack in alibaba. the investment is valued at $40 billion. in now less than 90 minutes away from the opening bell on wall street, yesterday, we lost about 300 points. down as much as 400. and closed right in the middle up 100, getting back roughly a third of that. from yesterday, we haven't seen the same type of currency woes that spooked the markets yesterday. as a result with apple with boeing, and prices with checks and balances. which we kind of -- well, we kind of -- no we didn't. we didn't figure that out. greg did and phil confirmed it and so did the analysts. no currency problem, everybody should do that. checking markets out, converting the u.s. into dollars. >> into dollars. >> that's what i mean. anyway there is the foreign

markets, which are -- except for greece -- this is going to get -- i'm not even going to say fun to watch, but 18% interest rates again. they owe $9 billion in -- they're not going to raise it between now and the summer. they got to either borrow it or not pay it back. and if they don't pay it back -- it's kind of a combination of both. >> i was thinking about geoff yang whether or not to peak our own tech things. venture capital up 16.5% in the money raised in 2014. part of this is the enormous markets throughout. part of this is surprise capital. you're squeezing more capital it's got to go somewhere. uber at $40 billion. that's -- >> the expectations with easy money around the world. secure zurich, interest rates where's it going is there some place it's going where it shouldn't

be? >> i think that's why you see alternatives, people putting money into real estate. >> we 19 some noncorrelated assets. >> that's pretty good joe. i like that. >> not everything goes up all the time. i'd like to have something that might go up if things go down don't you think? >> yes, i would. >> we're going to get the views on apple. apple is crushing it. last quarter it sold 74.5 million iphones. millions more than expected. and this apple has enough cash to buy ibm, all of it $178 billion. just with the cash they have. joining us now is dawn kovell dawn, we understand it's on quarter. it sounds like listening to tim cook he still thinks there's a huge pipeline of customers who haven't upgraded.

how long does this go on for? >> that's a huge question you thing can there be another customer left on the planet. but tim cook his call of investors yesterday was really bullish. he said look only a low number of existing iphone owners have upgraded to this device. there are potentially millions more. the iphone 6 which is a bit larger is more attractive of getting people to switch from the android to the apple. tim cook seems to think there's more opportunity there. moreover, it's capturing people who have never owned a smartphone before. tim cook sees a lot of upside. >> what's your sense on the upside cycle? at the moment 2 looks like they're killing it. does there ever come a point where it becomes an ipad. people say, it's pretty good. i don't need to get one every year maybe i'll hold out for three years? >> will there definitely has been a different in the smartphone cycle. they can be replaced every

couple years. the mobile carriers have encouraged us they allow us to upgrade to new devices in a couple years. tablets are longer, they seem to resemble laptops which could explain the difference. >> one of the critiques answer it's hard to critique anything that apple is doing at the moment. it's become a one-product company for and for them to excel over the long term wouldn't it be nice for them to diversify? i know they have the watch coming in april. what is your view of what the product looks like is there anything that's a potential game-changer beyond the itv which is like a unicorn. >> that's a great description. oh my god, tim cook was tantalizing us with that again. talking about how apple tv had sold 25 million units to date. we're still looking at it that perhaps the long-rumored apple t

vcht will come. as you mentioned the apple watch comes out in april. that represents a whole new platform for apple. it's an opportunity for apple to create new experiences for us on our other device. that has potential upside. analysts are guessing again it would sell anywhere from 10 million to 3 million of these smartwatches over the course of 12 months. that's a new opportunity. plus apple pay. tim cook offered some early insight into the performance of apple pay which is apple's mobile payment platform that works on the phone and presumably the watch. that accounts for 2 out of every 3 of these contact list transactions that happens over the last three months. that's pretty significant momentum. >> greg maffei here apple tv what can you tell us that we don't know already about this? >> nothing. >> what do you know? nothing about it or you can't tell us anything about it? >> for the former. you know they're very good at

keeping their plans quiet. and this one has been quiet for a long time. >> is apple friend or foe are in your mind? >> the music industry thought they were friend until they weren't. >> we have a lot of music guests so we watch that closely, too. on the tv side they're obviously trying to wedge themselves in and trying to find a place between the cable companies and the consumer. and there are relationships where they can drive demand. they can help turn or do things that would be positive. >> do you see them actually selling a physical tv or a box? >> well what it's the tv going to be a screen. they already sell screens, i think they'll sell a physical screen. the box is going to have the intelligence. the screen is just going to be a viewing device for lots of things. >> greg thank you, dawn thank you for waking up early on the west coast. appreciate it. when we come back the fed

is ready to wrap up a two-day meeting. we'll tell you what investors can expect. plus more on two city pros cit's and barclays greg cantor will be here. "squawk box" will be right back. do y ou like to travel? i'm all about "free" travel babe. that's what i do. [ female announcer ] fortunately, there's an easier way, with creditcards.com. compare hundreds of cards from every major bank and find the one that's right for you. creditcards.com. it's simple.

welcome backs to "squawk box." the fed will issue a monetary policy statement this afternoon. a look at what some are expecting, steve, good morning. >> andrew good morning. what they're expecting is a later liftoff for the first fed rate hike if they get around it the first rate hike in nine years. i want to get to a deeper dive in the data. it's interesting it shows how things are changing. the first thing when you look at this in respondents to the cnbc survey, the plurality. the most number of respondents think that first rate hike does still come in june. but what's happening the tail of this distribution those thinking it's later third quarter, september, and even two for the first quarter of 2015. and one coming out all the way out in 2017 that tail is growing. that's why when we do the

averages for that first rate hike, what you seer it's gone from the prior survey which was july and now it is september, which is quite a bit later. and get becomes, the fed does not have an economic projection this time where they tell us the trajectory of rate hikes that they had foresee. whether or not the fed would also do this if they would also push it ahead if they get it we don't know that. until the next set of economic projectionses. . finally, we've been talking a lot about these issues why are interest rates so low. we polled our 33 respondents and the biggest is low inflation. european qe even less of a factor. easy fed. not so much of a factor but flight to safety is the number two position. joe, we're looking at the today say it remains operator perhaps some tweaking with inflation, my best guess is because there's no press conference this time around, the fed is going to let the statement pretty much stand.

and if they do need to correct what our respondents are thinking, it's the outlook for fed policy it will happen on a day at a press conference. that decision comes at 2:00 today. you can tune in for like that. it's like a ghost town here there's some tumbleweeds here blowing across. >> steve, you lower inflation doesn't stipulate just here? did you specify -- >> we did not, that's a good point. we could go back next time around and add that low u.s. inflation or low domestic inflation or low overseas inflation for sure. >> that's the whole question when the fed says they're data dependent. i want to know is it global data dependent or u.s. data dependent? >> well i think they're u.s. data dependent. to the extent there are issues that have to do beyond oil. the fed is be looking through oil that it is looking around the world for those influences. generally, joe, box the united states is such a big economy,

we're more the pricemaker than the pricetaker. we really have a small percentage of total growth or gdp coming from overseas. half of what it is. >> we've employed a lot of deflation. and we know what's going on with interest rates. there's no way in the back of their mind that doesn't factor in their decision. >> you bring up a good point, real quick, the issue of whether or not they would add this problem of overseas growth to the statement. on the one hand they have that. and the massive action by the ucb. my guess is they cancel each other out and they don't make a statement. and the bottom lines in the number of groups with cat and microsoft a couple victim. what we made of these today, apple and boeing a different animal entirely. joining us now is citi's chief strategic larry cantor from

barclays. you're looking at this like assumed gdp number and multiplying what that correlates with at corporate earnings you're at like 13%? >> no, we're not, give me some. >> you have to -- no earning growth. >> okay. so our economists a forecast is 3.6% gdp. historically, every percentage point of gdp is worth about 4% of eps is and s&p. you go back in time. that would get you 14. we're looking at about 7%. we've already trimmed back our numbers from any hit of energy translation from the overseas business. and i'm actually surprised that anybody is sprielgsed by the currency hits or the compho commodity price hits that

companies are seeing. this is obvious. >> you can't adjust your 7% -- with the currency factoring that out if you knew it was going to happen people should be down from where they are. larry, it takes a while for people to feel flush from the tanks. in the meantime the s&p group that's dependent on this when does the good part of these things factor into these numbers? >> well i think, remember you've got these two big lifts, right, lower oil prices, a longer dollar. stronger dollar. and this is going to shift the composition of income in the united states. basically, it's been going the other way. we've been looking at gdp with the consumer spending, there's an income side. i disagree a little bit -- >> with who? >> the plus to consumption with what you saw, it's happening

now. >> it is? okay. >> fourth quarter consumer spending we don't have fourth quarter gdps, likely to be around 5%. so it's happening now. one other thing i'd point out in relation to what steve said regarding inflation here and inflation globally. lower oil prices a stronger dollar has an ambiguous effect on inflation. by the way i don't think everybody is prepared for this. starting early next year you're going to seeing in tiff head line inflation prints. it's going to be negative. for the year at the december reading, that makes it very tough for the fed. whereas, if you look overseas their opposing effects on the one hand lower oil prices reduces inflation. but they have weaker currencies which goes the other way. see what i mean? so, i think, number one, this is tough for the fed. the labor markets -- we haven't seen a labor market like this in decades. you don't see the unemployment rate falling at a percent or more a year. that's rare. 240,000 payrolls in the last few

months, more like 280. on the other hand you're going to go into deflation. having said all of that i think it's a bit of a red herring, personally, whether they hike or not. suppose they hike a quarter point. no one thinks the fed's going to be out to kill the economy. this is not -- with deflation, come on. this is not -- so this is going to be in my opinion, more like when they had had the qe and everybody freaked out that the bond market was going to sell off. they did it three time they ended qe. and it rallied. >> is this as bad as it's going to get? and it's going to get better from here? >> i think the u.s. -- as tobias said it's averaged over 4%. today, that's strong growth. i think the next two quarters are also going to be over 3%. >> so -- it's hard to have deflation when the economy is

growing that fast. so headlines are going down a while because oil collapsed. i think there's more of a risk in places like japan and the euro area even those currencies are going back. >> let me push back in one aspect labor aspects are about 60%. commodities, really not focused on commodity costs. if you look at the focused calculation. the number of civilian unemployed. divided by what's called the jolt of job listings. how many people do we have that can potentially fill the corporate steed? the fed has been doing this for 35 years to focus on core inflation. all of a sudden, they're going to say oil prices are down forget what we said for 35 years. we need to risk that credibility. >> after all is said and done lower inflation and oil prices

are good we'll finally decide that's true? >> nobody is going to want to rush ahead and put too much on the multiples. and multiples aren't expensive, they're not cheap. they're somewhere -- >> if you sell stocks because of oil prices do you buy stocks with ramping inflation and 200 oil? >> no, to be fair if you go back stocks kept pace with inflation. you prefer a disenflation. deflation is horrible. >> you think the sale thing, sooner or later, these are good? >> well see, the way i look at it, oil is a price, right. everybody who is paying it somebody else is getting it. the negative effects play out for years. nobody's going to stop producing gas in the shale fields in dakotas. they have people there. they're not going to buy the next field. over a few years you'll see the

negative effects on equipment spending. but the consumer is getting the boost. i think this is the positive of the short term. >> okay. thanks. when we come back this morning, we have reaction to video of the new feature in particular in the new car that has passengers holding on for dear life. the video after the break. later, senator john mccain talks tax reform immigration and the economy. he's just back from saudi arabia, we'll talk to him about that. "squawk box" will be right back. do y ou like to travel? i'm all about "free" travel babe. that's what i do. [ female announcer ] fortunately, there's an easier way, with creditcards.com. compare hundreds of cards from every major bank and find the one that's right for you. creditcards.com. it's simple.

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check this out. we showed you some video of people looking shocked on -- or maybe soiling themselves. just reading here. those folks are riding in the upgraded model s by tesla. it has a button that allows the driver to switch from insane mode. sending the car from zero to 60 in 3.2 seconds. that is comparable to sports cars like lamborghinis and the ferrari. it's features and delivers 6 everyone pounds of torque of zero rpm. >> what happens if you do that on the highway? >> do you think that's legal? >> you don't have to -- i have a

tesla. the acceleration is ridiculous. you take people for a ride and they pull back in the seat. >> you love that you're not allowed to go zero to 200 on the west side highway. >> you should be careful. >> or at least you shouldn't do that during the day. >> the daytime when the cops are out. when we come back after the break, we've got senator john mccain, he's joining us. later with less than a month before pitchers and catchers reports, behind how how the atlanta braves is doing. the ceo is joining us. take a look at u.s. equity futures. dow up 101 points nasdaq up about 61 points. apple there. s&p up about 15. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate?

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♪ welcome back to "squawk box" this morning. some stocks to watch. boeing earning $2.30. revenue above forecasts. we talk about shares of video games, electronic arts e.a. earning $1.22 per share. it's above estimates.

the company raising foreign guidance. and holding shares the main chip suppliers to apple it's gaining after apple posted a record quarterly profit yesterday. president obama returning this morning from saudi arabia after the funeral of king abdullah. arizona senator john mccain was one of those people and he's here to talk about how important the saudi relationship is for the united states and also much more. senator mccain we should mention is the co-author of the book "13 soldiers a personal history of americans at war." senator, thank you for being here today. >> well thanks i just got off the plane about 45 minutes ago from saudi arabia. so i may not be as bright as usual. >> hi john. >> hey. >> senator, you're just back from this trip to saudi arabia, obviously, saudi arabia has been an important ally for decades.

i just wonder how with the transition where things stand? >> well first of all, i think the transition is smooth. the real question will be the next transition box there's a whole lot of people that are -- will be in competition, and they have an interesting way of choosing the next leader. but this one will be in keeping with the saudi policies towards us. and the region. the saudis are more frightened and i am more concerned about the rise of isis. and even more the incursions of iran into different countries. right now, iran has significant influence in iraq syria, lebanon, yemen now, where they're sponsoring the houthis who have basically taken over the governments of the country. so they're very worried. and i am worried, too. and frankly, they perceive a

lack of strong american leadership. >> what should we be doing at this point that you think we're not? >> we haven't got time on the program, but let me begin by saying that we should arm the first syrian army. we should have more american boots on the ground in iraq and syria in the form of air controllers. intelligence capabilities special forces others. we should be understanding that this is one fight, not two separate ones between iraq and syria. where we seem to have two different strategies. and finally, we shouldn't be training young men in saudi arabia as we are, and sending them into syria to be barrel-bombed by al assad. there's a delusion that we're going to have an agreement with nuclear iran. and that we're working together. the iranians are on the march in the middle east.

>> the iranians on the march. even the things were you talking about, arming the syrian army. that's something that you've been pushing for years. there's no progress on that. is there a point it's too late to stop doing something like that? we don't know who the good guys or and the bad guys are. >> that becomescreaseing problem. the free-syrian army there's article on "the wall street journal" about the foubables not arms the first syrian army. in iraq it's the shia militia fighting isis right now. the shia militia are people we fought against. the iranians have significant penetration into iraq. the iranians have now basically taken over yemen through their

clients the houthis. so the list goes on and on. but we need to have a steadfast policy. we need to have a strategy that will work. right now, we have no strategy. the next time you have someone on the administration on this program, ask them what's the strategy against isis and against bashir al assad. >> the strategy is don't do student stuff at this point, isn't it? >> that's pretty compelling for the nation. that's remarkable. the saudis have probably done the most beneficial thing recently and that is of course the price of oil which is weakening vladimir putin. by the way, we still refuse to give defensive weapons to the ukrainians. that's another shameful dishonorable chapter in american history. >> john the president said the elections have consequences. one of the consequences of the most recent elections is you are

now the armed services chair. what are your priorities and what are you going to fix or ameliorate the impact of that? >> thanks for asking greg. in about an hour we're going to have a hearing with all foreign service chiefs who are going to describe and i'm saying in drastic terms, the disastrous effects of sequestration. and if sequestration is not appealed over the next two years, they will testify that they don't believe they're capable of defending this nation against the threats as they see it. we have to convince our colleagues in congress and maybe get the president to weigh in that we've got to repeal the sequestration. look i'm against the waste in this mismanagement and cost overruns. and i'm very much disliked in some parts of the military industrial complex. but sequestration is not the way to do it. then, of course we have to try to force the administration to come up with a strategy in the

middle east. and against vladimir putin. >> so those are just a few things on your agenda. how do you deal with immigration as a larger issue? do you think this is something that we can get resolved in the next couple of years? >> yeah i think we have to. i think we have to address this issue. and we can secure our borders. and we must secure our borders. and we have to change the law that applies to these children outside of mexico that they just show up at our borders and they're immediately allowed to come in. if they have a humanitarian crisis, they should go to our embassies and consulates in hone ndur ross el salvador and guatemala. we have to have a system a guest worker program. and all of these things can be done. maybe the house wants to do them step-by-step. that's fine by me. but the situation, as it exists in my view is not acceptable

including border security. >> senator, i warranted to ask you a pop culture question related to armed services. you are a decoratinged veteran. i don't know if you saw the movie "american sniper." i want to get your reaction. michael moore has been critical. he tweeted this my uncle killed by a sniper in w w-2, we're taught that snipers were cowards. we'll shoot you in the back. snipers aren't heroes. and invatders are worse." have you seen the movie? >> i doesn't see the movie. i intend to see it. sometimes when i hear an idiotic statement from someone like michael moore i don't want to dignify it. that's like saying we should not use airplanes, we should not use tanks, or other weapons. what does he want hand-to-hand

fighting? the most important thing, these brave young men, they're the most highly skilled, saved the lives of other of their comrades because they're able to neutralize or take out an enemy that's been destroying them. better capability that we have the finer young men that we have, the better off we're going to be. i just -- you know it really does a great disservice to stay that about so many of our young men and women who are serving in the marines and the army. and many of them are scout snipers. it's almost insulting to them. >> so john continuing on pop culture for a moment. you're a big football fan. if carson palmer weren't hurt would this be a home game for the cardinals? and more broadly, you had some commentary recently in the nfl obviously with ray rice and concussions. and adrian peterson and

everything else. what's your view on the nfl with right and wrong about it? >> you know the nfl and mr. goodell are public figures, and they have to understand that. and that means that they better have a public relations training and team to understand that you have to -- that we're in a 30-minute or maybe even a ten-minute news cycle. and you'd had better be ready to respond immediately for things that happen such as those that you just mentioned. you have to respond. it isn't good enough to wait some days and then hold a press conference, as was the case with the race the rice situation. and not have an answer. if i were them i'd do a little pr training, because especially in the most popular sport in the world outside of soccer. and our friend bud selig is retiring now. i think that maybe they ought to

look at the way his stewardship which i thought was overall very excellent of organized baseball. so, they're not responding well. and they have to be ready, and the american people especially on an issue like this are insatiable for their desire for information. and they are very impatient. >> you think that this is though, a particular league's mishandling of it and not necessarily society kind of changing more quickly than lots can catch up with it? or do you think this is a problem in particular to the nfl? >> i think it's particularly to the nfl at the moment, although other sports can learn from it. look, i was involved in a scandal one time a long time ago. i don't even want to refresh your memory about it. but the one lesson is when something like this happens, you got to get all of the information out there as quickly as possible. answer every single question that exists. that is the only way you get

over it. and even then it takes some time. >> senator, we'd like to thank you very much for your time today. really appreciate it. >> always glad to be with you. >> thank you, john. senator john mccain and his book is "13 soldiers a personal history of soldiers at war." 24 days until pitchers and catchers reporting for the atlanta braves. it's also week one for the new commissioner of baseball bob manfield. we're going to take the field with the chairman and ceo of the braves after the break in just a second. breath in... and... exhale... aflac! and a gentle wavelike motion... ahhh-ahhhhhh. liberate your spine... ahhh-ahhhhhh...aflac! and reach, toes blossoming... not that great at yoga. yeah, but when i slipped a disk he paid my claim in just four days. ahh! four days? yep. see why speed matters,

at aflac.com. welcome back to showdown! jerry rice here with 8 year old andrew hunter debating who will win the big race between the tortoise and the hare. what do you think andrew? rabbits are faster. it's not a rabbit, it's a hare. what's the difference? maybe figure that out before debating the best wide reciever of all time. wait, are you odell beckham jr.?

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welcome back to "squawk box." this morning, shares of soaring, the medical device making raising it's forecast. and a free scale semi conductor sales getting a boost on earnings and upbeat sales forecast. the growing demand. u.s. steel beating the streak. but it warns low oil prices could negatively impact its business this year. still, it suggests the potential for u.s. spending could help demand. finally better than expected earnings, and sales and the driver and growth of sales sales of its sports. >> i was on the e.a. board for years. they're doing a great job to turn it around. he's doing a wonderful job at

that company. we're talking baseball. new era for major league baseball. as soon as i said era, i meant e.r.a. it's not e.r.a. rights with that. it's digital media not being able to achieve record revenues. but can the league solve its problems. we're joins by terry mcguirk, chairman and ceo of the atlanta braves. it's a great pastime, terry. you look at football and the reeminence they don't look at local markets. radio and tv if i got to watch and listen to the red, i would do all 162 games. it's different. we think football is now number one. but baseball is on the up and up, right? >> well i was just watching the previous segment and the senator paid a nice compliment to baseball that bud selig did a

wonderful job in his leadership. so i'll take it from the senator that maybe we're doing something right. >> yeah but for the grace of god i'm sure you take no satisfaction with what's happening in the nfl, with steroids, baseball's had a lot stuff happening. trying to figure out how to cut games down from 3 1/2 hours, right? there's some problems with baseball. atlanta might have been the country's team. but everybody else still sort of confined to a smaller market. you might not watch the world series if you're team's not in it. >> well baseball is predominantly healthy, i'd have to say, it's in great shape as bud selig, the ninth commissioner leaves office this week, and bud leaves it to rob manfred to take over as the tenth commissioner. things are healthy. certainly pace of game is something we're looking at.

games inexplicably have gotten longer. we would like to cut them down. pie have no doubt rob will be successful. >> maybe shotput with pitchers right? >> i think that will happen in the minor leagues. almost all of the experiments to shorten the game will happen at the minor league level or the arizona fall league and then move to the major league. >> with football, by deflate deflate-gate deflate-gate with the pitchers will that give them time to put pine tar or spit on the ball to get that action? >> i'm not sure i should continue this line of questioning. >> everybody looks for an edge. in sports i don't want to think that deflate-gate is like a guy that had action on -- >> 90 seconds in the bathroom i don't think there was enough time. terry, i have a go -- good to see you.

>> good to see you. >> people think baseball is a sport primarily for older people. but amazingly, baseball has been on the forefront of digital rights, getting on top with b.a.m. baseball media. and make you can talk about how you see it going forward? >> it's now 20 teams pulled their digital rights to create a service to stream video to consumers mostly on the pcs now migrated to all mobile devices, ipads iphones. the service has been the streaming video of all of our games, all year long. it's been incredibly successful. b.a.m. is probably baseball's proudest achievement in the media world over the last 20 years. and just that -- we called that

the front end business of b.a.m. >> b.a.m. issing to the technical outsource their requirements to b.a.m. as i understand it. >> perfect. that's where i was immediately going to. that's one of the more exciting pieces of this asset is the back end business that b.a.m. has created. and b.a.m. is servicing probably 25 companies right now with back-end digital distribution to all of these mobile devices and doing a fabulous job. hbo recently announced that it is using b.a.m. for its distribution over the top to pcs and mobile devices and i think i was reading in the paper today, wwe, which uses b.a.m. had another huge increase. it's a very successful business. it's west bank of the untapped

pieces of -- hardly anyone knows about. it's a quiet business. but it may be growing even faster than the core digital business that everyone knows about. >> thanks. when you're in town come on the set with us hopefully, once in a while, from down south. >> thanks terry. >> very good. >> see you later. >> when we come back cramer's going to talk apple, yahoo! boeing and more. we'll do that next. more from our guest host greg maffei is here. "squawk box" returns in a moment. stamps.com is the best. i don't have to leave my desk and get up and go to the post office anymore. [ male announcer ] with stamps.com you can print real u.s. postage for all your letters and packages. i have exactly the amount of postage

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down to the new york stock exchange. jim cramer joins us now. every day's different, isn't it? today, it's wow, apple and boeing yesterday it was awful. today, good numbers. >> dwra. really a day-to-day thing that sounds silly. caterpillar is poorly run, didn't execute well. boeing, problems in defense, looks those were solved boeing, worry if oil went down so much, people would get new planes. not what american is saying not what southwest is saying. it's come together. boeing is a conference call stock. it's possible that mcnerney says

something not in sync. united technology stock's at 115 when the market opened went up to 120, conference call was terrific, you had to listen and people hadn't from the night before. i got to stay close to boeing's conference call before i'm sure. >> you don't see it in boeing's numbers with forex stuff, if i were a european carrier, i'd be airbus now. couldn't that hurt boeing if you have to pay dollars for boeing's jets. wouldn't than 20% more expensive than it used to be. wouldn't it hurt carriers. >> right. to me the big subsidy is to a couple of companies, to zeman's, phillips and airbus. the idea is no one's going with boeing because it's a discount. boeing is a great american manufacturer and superior planes and producing at a higher level. plenty of demand. those who think boeing's going to lose the dollar raise are making a mistake.

>> jim, see you in 4:12. 11 seconds, 10. >> when we come back digital download. changing face of music, how liberty media is taking advantage. checking on futures, dow futures up by 737 s&p futures but by 12. "squawk box" after a quick break. grand prix race car made history when it sold for a record price of just under $30 million. and now, another mercedes-benz makes history selling at just over $30,000. and to think this one actually has a surround-sound stereo. the 2015 cla. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services.

guest host, greg pla fayemaffei. driving around listening to sirius. >> cnbc. >> loser. you discover blues em. >> not a huge fan. >> who? electronic dance music, edm. >> you are lying. >> sirius alt nation deep tracks. >> classic vinyl. >> if i hear it led zeppelin. >> what about download? what about the state of the business taylor swift? >> i think all of these guy whose have models predicated on free service are going to get challenged because the record companies are going to degrade that free, artists don't like free they think it's

commoditizing the music and a lot of price competition from people like apple. >> that was fast. we have no time. >> thank you. come back. you have a home on "squawk box" and don't need to go anywhere else. >> my house isn't far. >> join us tomorrow. right now it's time for "squawk on the street." ♪ ♪ i got to have faith♪ >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla david faber. stock market calling for backup in the rough earnings season and looks like apple and boeing will deliver. futures set to bounce after the worst day for tech stocks in three years. oil back on its heels. down 2%. it's fed decision today, ten-year hovering above 1.8. road map,