century of the empowered consumer. now they can learn about health care from the web, they can take greater interest in their own health, be more focused on managing issues better. they can be better educated because they go to the doctor's office. this is the century of the empowered consumer. >> fred thank you so much for spending the morning with us. really really appreciate it. >> time for "squawk on the street." ♪ fries with that shake fries with that shake♪ >> a new york city hot dog cart. today on wall street. shake shack public at big board. talk to founder danny meyer and ceo randy garutti late art post 9. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at new york stock exchange. futures lower on the miss in fourth quarter gdp. earnings to get through. oil below $45. and the ten-year yield below

1.7. markets, disappointing print on gdp. ruble slipping overnight after yesterday's rally. futures are in the red. >> amazon stock is up sharply, results beat as profits returned to seattle. google misses stock fell 3%. then the conference call. google shares higher in the premarket. we'll tell you why. and visa posts strong results, the stock split, that stock also up. but first up, futures moving lower on the final trading day of january. gdp below expectations up 2.6. weaker business investment wider trade deficit offsetting a nice pop in consumer spending. chevron, mastercard among companies posting better than expected earnings but the major indices on track to post declines for a second consecutive month. we haven't do that in a couple of years. oil shooting for serve months down gold for three months up. crazy times. >> we're the opposite of europe. europe is fantastic for this

month. a great stock market. great stock markets there. i'm struggling to find what stocks are fitting the futures profile. in other words, almost every stock that i follow today is -- has something good because of earnings. i know that, look you can shave something off of boeing, whatever. the these this of individual stocks really good in the last 48 hours with the exception of alibaba and qualcomm but you know what the futures overpower. when i saw 1.67 on the ten-year i said okay bad day. you can't co-exist with interest rates going down because the machines algorithms don't let us. >> and the dollar gathering strength as well or is that less a part. >> no dollar's big. last time visa comps lent conference call. charlie sharp amazing. travelers aren't coming here europeans aren't coming here.

brazil's not coming here. big decline in tourism. >> tiffany could have told you that, right? >> yes. i -- visa charlie sharp puts on a clinic. >> the numbers he shared in terms of what they're seeing amongst consumers and what they expect to see interesting. >> don't you love that? >> gives you granularity in terms of expectations for consumer spending. >> 50% save. >> particularly savings and spending that will come as a result of fall in gasoline prices. >> saying after the $60 per month, he's low but he's got the receipts, so obviously i don't -- they're saying that the second half of the year will be strong. the granularity, let's put the drop in context, u.s. oil fuel prices down 30%. according to surveys, 50% of the savings being saved, 25% used to pay down debt. this is america. pay down debt in our country. 25% spent discretionary. wow. i thought that was eye opening.

no one has figures better than char. >> i mastercard out with the beat two-sent beat revenue up 14 purchase volume up 12 in local currencies. but we're not seeing much effect from low gas prices as we expect. >> these guys get hurt the size of the low gasp. a.j., cross border. few industries where you have two titans. i mean look there's a lot of ceos -- i hit some ceos but certain people you say, wow. those companies are run by smart guys. >> yeah. there's another smart guy out in seattle, bezos, nobody can argue. amazon shares up after the company beat estimates with holiday quarter rps rev. revenues up. amazon says its prime membership rose 53% in 2014. still not telling us how many

prime member there's are. >> no. i'm estimating 40. >> 40 million. move up to 99 a year did not hurt prime. margin number was better. >> how do you like that? >> it was better. therefore, profits significantly above what people anticipated it does seem when you're about at the point to say, we're done with -- it's never going to happen the way the bulls believe it will they always throw a quarter in there to make you a believer again. >> google did the same. people thought that google quarter -- my charitable trust owns it -- down immediately and used the call used the word discipline four times. amazon absolutely saying listen, we're going for profitability growth. google mentioned profitable growth over and over again. chase and buy the stock market. these guys don't like what happened with the stocks. >> well-controlled companies. >> you think they've gotten religion in terms of posting operating profits? >> i thought google -- my

charitable trust owns it -- i was initially dreading it. i read the release. they had a million one-time items, like millions of dollars. they said we're putting google glass on hoemd.ld. we're not doing it any more. >> what are you talking about? their margins would be twice if they weren't doing this stuff. >> operating margin went to 24 from 28. >> it's a spigot. it doesn't turn off. they've been spending so much. this was the quarter i felt they said we're going to start monetizing youtube. look -- >> at rates of monetization on youtube are not for pure search. the greatest business created. it's dominated but it's moving facebook, at lass snapchat so many different names that going to be challenged on for their core business. and the question is is all of the spending going to relate to something that equiv lates to that. >> talking about a buyback because they realized maybe more

mature. i want them to spend on youtube. how about salespeople to sell you -- the commercials from the super bowl watched millions of time on youtube. youtube undervalued asset. they've spent too much time doing google feet and google socks and whatever, and nef done a they've done a lot of stuff i don't like. this was the quarter i thought they said, look you know what maybe we've been doing the wrong thing and maybe we have to return cash even. they were sensitive. the analysts are in revolt here david. >> do they care though? >> i thought they cared. i thought they cared. >> 64 billion in cash now. people arguing starting to burn a hole in their pocket. >> i thought that they cared. >> i don't know. >> because they were defensive. so defensive. one guy, hire 3,000. wait we're more disciplined. disciplined. noisiest quarter but business on track. 18% growth in revenue, 17 types

earnings. why am i supposed to sweat the program? i'm not sweating the program. >> something to be said for companies willing to spend, spend, spend, and in order to try to stay on top. we can sit here and say those guys could have gone in so many different directions and end up like yahoo! when on top they didn't do what they needed to do. amazon, and his willingness to just you know stiff arm shareholders to a certain extend and say, i'm following my own path. >> i'm saying this as a brand-new google that cares? >> no you're not. >> i'm saying there were a couple of instances, 44 million views watched for the commercials on super bowl -- i mean there's a moment in this conference call where they're kind of challenged and they said guys i mean do you even care? they mentioned big clients. and you know one point said the issue of margins, look if you think the business -- we're looking for growth, we're looking for growth. here it was.

defining sentence for google. we're looking for growth in operating profits. hard to believe that you have to make that -- >> circle back to amazon quick here. breaking out web services results start in first quarter, 40% of inventories, now third party. where were you on amazon before? has that changed? >> i was shocked. i mean i'm in the world that says that the last quarter was, they mentioned spend. i counted the numbers the times -- we're spending in china. here, only time they talked about investing in india. a conference call that was about trying to make some money. i was impressed, i think the stock up 40, probably going up more than that. a lot of times we see stocks first day 40. this is ridiculous. you did your special. amazon web services is a gigantic business. >> oh, it is. it's a monster. and it's been extremely successful. now the margins on it not believed to be particularly

high. they are very price competitive in terms of offering that service. but it will be very interesting to see when they do break that out for us. by the way, on that other line you also have something at amazon advertising. you can buy search on amazon and why wouldn't you? right? you know people on the platform are looking to buy. why wouldn't you be buying search if you could? they're selling. it's also showing up there, i believe in that other -- other line which is also going up. a lot of people think it's only aws. it may be advertising, back to google and the competition that they will increasingly face from different platforms in search. >> i agree. two companies that offer tremendous value prosper, costco, i hope you're a executive member and google -- amazon with prime, where they raised the price and they got 50% increase in the united states. listen, now i want to join because it's more expensive. >> i know. the membership -- >> that's a club i want to

belong to. >> a club -- >> i'm a member of both clubs. they're huge parties. >> content, costs up 42 whatever percent, bother you at all, talking in billions now? >> no. >> starting -- studio from scratch, not a concern? >> i don't know. netflix, netflix -- >> it's -- well that's the thing. that makes it a value proposition that's interesting, the 9 bucks a year for -- 99 bucks a year for shipping. video service that we're using. >> i'm going away next weekend to be with my daughter. no dvd player in the hotel. i said doesn't matter. we've got amazon. watch whatever we want. amazon. netflix, by the way, starting to put things on i was talking to my research assistant, nicole research colleague, talking about "seinfeld" on netflix. >> right. >> netflix and amazon. you know mastercard -- you listen to conferences, now i know where the smart people went. they became ceos in major

companies. >> good. were you wondering where they went? >> i was thinking they're somewhere in the facebook basement. >> i throughout they were running hedge funds or something. >> no. that'siester year. and they're flipping burgers. just kidding. didn't mean the term flipping. people got in trouble using that term. but we are having shake shack. danny, 155 million man. probably the $300 million man. this is probably going to open at 40. >> i want my vanilla milking shake the new york shack exchange. we'll over at post 8 in a little while, as the shake shack opens for trade. fascinating story. mores earnings to talk about on the final trading day of january. we'll break down winners and losers. danny meyer and randy garutti on the big day for shake shack debuting at big board. one more look at premarket as january look to be the second month down first time in a while. more "squawk on the street" from post 9 in a moment.

have you heard of the new dialing procedure for for the 415 and 628 area codes? no what is it? starting february 21, 2015 if you have a 415 or 628 number you'll need to dial... 1 plus the area code plus the phone number for all calls. okay, but what if i have a 415 number, and i'm calling a 415 number? you'll still need to dial... 1 plus the area code plus the phone number. so when in doubt, dial it out! ♪ shake it up shake it up♪ shake shack making its wall street debut at the big board. the burger chain's ipo pricing at 21 a share, above the already increases range of 17 to 19. gives it a valuation of $746

million. trade under the symbol shak. we'll talk with founder danny meyer and ceo danny garutti after shake shack opens for trade later on. not only changed the names of the new york shack exchange. the buzzer they give you when the order's ready. apparently go off when the bell rings and first trade happens. >> i love. danny's an old friend actually from the '80s. he's -- his book "setting the table" i felt one of the greatest business books ever written. been on the show more than any other guest. created an index of stocks felt a prepare number p.e. treat the guests well, tripled the index. this guy knows stocks. people don't know or think that. this company, 63 stores understand each one made $5 million revenue, they've got great stores. >> you warned in "mad dash" the

other day that to be careful here. talking a multiple of sales quite extraordinary and unlike any, i think in fast casual. >> when i said 11 12 i said you can pay 18 20. a $21 means it's going to be at 40. i expect it to double at the open i'm uncomfortable with that, because as much as i think danny's great, that's a lot of pressure. remember chipotle is still king. >> think they can open ten stores a year for the foreseeable future. margins and growth non manhattan stores not what they are in new york. a question for danny down the road. >> does his comp store, for two year stack, there's a lot of things that danny does different. but i think that one of the reasons why this stock is going to open up so high it's not mcdonald's. i mean literally is -- look i go to shake shack a lot. a go to any city where there is one, there's one down the block from me i went to one in philadelphia.

people that go love it. they'll buy the stock like it's netflix, like it's facebook. i in that in the end it's still a company. i mean it's not -- it's not a good-tasting burger in and out burger, maybe that opens at 60. you can't just say it tastes good. they have to run a business that has some metric. chipotle, does have real metrics. chipotle, go back three years ago, remarkably cheap on a p/e multiple. these guys are fantastic business people. danny is a business person but wow at $40, expensive. >> yeah. >> 79 million in revenue for the first 9 months of last year. mcdonald's does that in one day. in one day. >> no no i know. the easterbrook, that's an interesting thing. what's going to happen there. but you have average cash return of 65%, payback period remarkable for the opening. dwarfs 40% from the habit. everybody loves the habit. danny

danny's got an overseas road map. versus 16.8 for chipotle which is why i'm worried but at the same time, this is a great brand. it's a worldwide brand out of nowhere. it's got to grow into the multiple, always difficult. >> right. >> grow into the multiple. >> look at chipotle 22-plus billion market value, what that's been able to do. do you believe if it's owned by mcdonald's it would have been able to have the same success? >> absolutely not. a good interview what mcdonald's has to do. they never slide mcdonald's, even off the record they don't do that. one thing that chipotle chipotle's a -- it's -- it's like whole foods. i don't want to call it a religion. it's a secular religion. they truly want natural organic first and so did the people. people regard chipotle as a place where you are eating healthy and it's worth that. >> i think we're -- if we can get danny on the floor, and

garutti, making their way to the bell now. your point about the food supply, jim, highly sought after, as a result as we saw chipotle, a couple weeks ago. >> chipotle is about the food chain. they think the food chain's corrupt in this country, therefore they're begging -- they're begging to be healthy and go eat at chipotle. shake shack, not, i think -- look shake shack does the same thing. it's that chipotle has done it on a scale unprecedented. >> as the s1 points out, occasionally it's going to mean supply interruptions because the average restaurant as three days' inventory worth of beef. >> when chipotle ran out of the regular beef they liked they put up signs we don't have it comp stores sales increased. some places have a lot of momentum. chipotle's really incredibly well run. putting more money behind pizza. when you interview jack my favorite cfo, brilliant. >> amazing story for a business that only started as a literally

a cart trying to help a park -- >> i did a lot of charity work for the man in square garden. i don't eat burgers. try it out. what was i thinking? wow. i mean madison square -- >> done a lot in our neighborhood. a great moment. one across the street -- the natural history museum. >> mine in brooklyn. >> been there many times i'm have not been to mcdonald's, to your larger point. >> we'll get cramer's "mad dash." count down to the opening bell. one more look at premarket. as jim said seeing more movement in dow futures. when you run a business, you can't settle for slow. that's why i always choose the fastest intern. the fastest printer.

the fastest lunch. turkey club. the fastest pencil sharpener. the fastest elevator. the fastest speed dial. the fastest office plant. so why wouldn't i choose the fastest wifi? i would. switch to comcast business and get the fastest wifi with the most coverage. comcast business. built for business.

♪ ♪ the time of my life oh, baby give me the time of my life♪ >> all right. it's friday time for a "mad dash." start off with biogen good. >> city, piper, raised numbers why not? franchise is good it's strong. that's a great main tense situation. keep teasing you on alzheimer's. people say they've got isn't remarkable. the stock has been a horse. it is not done going higher. >> alzheimer's thing, that would be amazing. >> even just -- m.s. franchise, un un unassailable, you have to take that for life. it's a well-run company. when they come on "mad money" i'm like, wow. >> as good as biogen decker is bad. >> they say things are good and they were not. this was a very big

disappointment. i say ug to this quarter. traffic was down not that great execution. many of their different kinds of shoes didn't deliver. people are saying longer term don't worry about deckers. a good -- this is sound despite bad execution. everybodies lowering numbers. this is a surprise to me. i have been with them twice this year. >> what does that mean. >> people not coming by the stores. china, they did not like what deckers gave them in china. and this is kind of a dazzling -- a very good executive. do you stick with it? i think it's a good brand but they miss tpded it. wasn't going to be seasonal. seems seasonal. a lot of warm weather in places. a head scratcher. i don't want to write this company off. i want to hear from him. the retail was very weak.

i visited one of the retail stores, i was under the impression things were going far better. i'll leave it with that. >> visa mastercard amazon google, dollar the ten-year and the shake shack ipo coming up right here on "squawk on the street." female announcer: don't wait for presidents' day to save on a new mattress. sleep train's presidents' day sale is on now! save up to $300 on beautyrest and posturepedic. even get three years interest-free financing on tempur-pedic. plus, free delivery, set up, and removal of your old set. and sleep train's 100 day money back guarantee. keep more presidents in your wallet. sleep train's presidents' day sale is on now! ...guaranteed! ♪ sleep train ♪ ♪ your ticket to a better night's sleep ♪

you're watching cnbc "squawk on the street." live from the financial capital of the world. opening bell set to ring in a minute's time. big chants here from enthusiastic crowd of shake shack employees as that stock

set to go public later on today, after pricing at 21. jim, you may think it's expensive but they clearly do not. well look no just want to warn people again -- look danny, don't take it personally we're very good friends -- if the stock doubles at open you've got a situation where you'll say, three days from now, are they going to reopen it again? no. i know caution is wrong. >> they still make burgers. >> still make burgers. >> although as i just said on twitter, the ninth anniversary week of chipotle's ipo. public at 22. >> danny can do that too. chipotle is the gold standard. it's not easily -- >> no, more competition. [ bell ringing ] >> there is a look at opening bell and s&p at the top of the screen. at the big board, shake shack, hamburger chain, celebrating its

ipo today. talking with founder danny meyer and ceo garutti. this did light up over at the nasdaq a clinical stage biopharmaceutical company. they know their audience. >> they went to a noncrinkle cut. a huge revolt. now back to cringele cut. >> love the crinkle cut fries. it's the guiltiest pleasure that i have in my life. but that's a statement about how hollow my life is. >> burgers are the biggest dine-out segment in the country, 72 billion a year nearly double what pizza does in the country. pizza's next biggest category. >> new mcdonald's ceo talking about how people like to treat themselves. you treat yourself. that's what i do at shake shack. when i'm down in the dumps i go to shake shack. >> steve easterbrook tweeted a moment ago, wow, what a 48

hours, thank for messages of support, big thanks to don #respect. >> let's stay tuned. when howard schultz came back, everybody goodt too excited, stock jumped 9% and stock proceeds 200 8, 2009 went from 19 to 7. like chipotle never looked back. >> one stock that had a big ipo here not that long ago, alibaba. $240 billion market value on day one. as opposed to what shake shack may be i don't know 8 million, maybe more than that. >> stock coming for sale. >> stock yesterday, alibaba down sharply after the company reported what were disappointing, i guess the best way to put it earnings hard to use that word when talking about 40% top line growth but they were. yahoo! of course taking it on

the chin with alibaba. today, upgrade over the evercore others coming out positively on yahoo! doing the math and saying if we apply 10%, 15% discount to spinco, where they're putting the 384 million shares of alibaba and we take what the worth is of their stake in yahoo! japan and discount that the core business is valued at nothing or negative. >> true. >> and so -- >> true. >> you've got a couple of analysts coming out and doing the math. yahoo! shares up a half a percent. >> i'm with them. the problem -- your interview with jerry tsai. >> joe tsai. >> talk about the government i mean the government, the government, what a poorly-timed -- the government's savy -- what a poorly timed release of the investigation. they knew it in july? >> they came back very combative, alibaba and the paper has been withdrawn now from that. >> look, alibaba is not as bad

as the stock. but there is a big expiration. i also -- a lot of people felt that you would see much better mobile. mobile's everything. if you go google google is mobile king. facebook loves mobile. make more money on mobile. mobile is everything. programmatic -- for google -- i mean these companies, honestly, you have to be 23 to understand the power. >> transition to mobile is an important one, as you point out. facebook has made it magnificently. >> yeah. >> given that number from bob yesterday, got some amazon people worried. irrationally perhaps. watch the stock go down 10%, they are at least in the same area certainly, e-commerce. i know some guys who may have owned amazon going into the print last night and said no i'm going to sell it. i'm afraid and they're hitting themselves now with amazon up over 12% this morning on those better than expected earnings.

>> look amazon quarter was a love fest. the google quarter, let me make it very clear, was very hard to understand. how could a stock swing 35 points? it goes down if the release -- because there were so many one-time factors that i really -- i tried to add up i gave up. you couldn't add them back. in the end 18% revenue growth and you came back with a company that has pseudoreligion in other words, episodic but we don't know. i felt -- i felt underthe gun when you questioned me about the notion of discipline because it's true. they still do some wacky things. >> they do. >> but they may return capital. that was big. >> got plenty of it. >> amazon's the biggest gainer on the s&p. second biggest gainer biogen. m.s. drug doing its wonders 409 beats 377. >> four stocks i recommend, biogen regeneron, gilead

celgene. celgene, did you see the numbers that bob released yesterday? he is saying they're going to earn 17 bucks in 2020. how do you put a multiple on that son of a gun? geez. 1250 -- you give it a 30 multiple? when regeneron reports that's going to be the best. the best. >> chevron, 1.85 beats 1.64 but looking to cut costs across the board, jim as a result of what oil as done. >> chevron, 100 december 15th. the low for all of these except the drilling stocks. listen, core labs the scientist, guy who does reservoir management came on "mad money" and said we're going to bottom this year. we'll be higher maybe double next year at this time. i don't know about that. using statistics that show some of the wells go down so much and

the drilling, oh i think we're going to see a bottom in the oil in second quarter. >> really? >> yeah. not first quarter. still production coming on. >> we talked about mattel earlier in the week when they axed their ceo, brian stockton. 52 cents, a big miss of the 92 cent estimate. barbie down 16. third consecutive year barbie's fell. fisher-price down 11. american girl down 4. >> what's going on with toys in general? >> hasbro -- i think these guys got the wrong lineup. yesteryear names. kids -- e.a. electronic arts look at their numbers. it's the opposite. take 2, the opposite. wait until evolve comes out. >> we both have girls. my still play with her american girl dolls. >> yeah. >> and barbies. >> throw back. wear a throwback uniform. we're throwbacks, we are.

no devices. dolls. >> and we haven't done tyson, 77 cents, beat business 4 cents. hillshire integrations going okay. >> these companies take a look at one of the things that i loved about the dow chemical call was the crop business. it's strong but remember the raw costs for chicken is corn corn was glutting. starting to plant more soy around the world because corn's so glutted. i do think that the dividend this is a hormel's very good. i like -- i like the stocks that have the raw costs coming down. look at visa. look at these things. this market's out of sync with the companies. i reiterate, futures shouldn't be as powerful as they are because the individual companies reported unbelievable numbers. great piece jim stewart on apple. >> and apple's up again, not a great deal but it is up 119.38 a share will get you a share of

apple. >> taking out that high which is what people were concerned about. about that said broader market reflecting continued concerns we've talked about so often. you've discussed at the open of the show 1.7 or less yield, dollar 15-year high against consumers, up 15%, i think 11-year high. >> but then visa, charlie scharf lays it out how bad the currency is. he knows currencies better than anybody, too. you say, look yeah currency horrible, currency horrible. up 13. okay? if you have got a really good business, you're overriding currency. proctor & gamble not as good down again today. >> really quickly, visa the waiting, because of the 4 for 1 split, waiting on the dow going from 9% to about 2% or 3%. >> i know. >> goldman the biggest. >> hedge funds won't be shortening. this was a smart idea split 4

for 1. hedge funds jam it down. scharf's better than that. >> mary thompson on the floor, with the dow down 33. >> like a pep rally all morning here with all of these people from shake shack waiting for the first price. what we saw at open triple digit decline for the dow jones industrial average, dropping 121 points. weight on the markets early on disciplining data on fourth quarter gdp here in the u.s. we saw a decline in business equipment spending in the fourth quarter. also slowing exports which shouldn't be a surprise given the bump up that we've seen in the dollar or dollar strength. also, of course we have disciplining data from europe on consumer prices. both of those things a factor here. it's actually a mixed market because the nasdaq is showing strength in large part because of gains in the big cap tick. along with the response to the earnings, we're also keeping watch on oil. the markets have been correlated closely to the movements in oil. right now we are seeing a pick up in oil prices as the dollar

has pulled back a bit. a couple of dow components. talking about visa earlier, splitting its stock, 4 for 1. last night the company said foreign exchange or currencies impact second quarter revenue but maintaining full year outlook, raising fees and that should have a positive impact on revenue in the second half of the year. chevron with a better than expected number. mastercard reporting coming in with earnings two cents ahead of expectations. like visa, the company reported 11% increase in total processed transactions in the fourth quarter. quick check of the big tech names. google and amazon of course google missing but positive comments on the growth. investors like than shake shack, waiting for that to price. priced last night at 21. right now early indications 34 to 36. i'll be standing right here and have the price when it happens, guys. back to you. >> collect in with rick santelli and get the -- at the cme.

>> good morning, carl. there's some out there that will say some countries would kill for 2.6 gdp. i get that. but it was a disappointment and reflected quickly in rates. the ten, 24-hour chart, down 7 on the day, down 12 on the week and down 50 on the year and it's not february yet. two-day chart the minute the weakness took us under from the data yesterday's low yields which were virtually real close to the 19.5 20-month low yields established on the 15th of january, everything changed. so as we moved down open the chart up you can see that mid-january number. open the chart up all the way for the full 20 months from may of 2013 and that's where we sit. we have to look at a 20-year chart for 30s. sorry, folks it's the longest one i have you're not going to fine a lower yield on. yield curve flattening. a big top ex- talking about it a long time 10s minus 2s, reached 120.

that's the distance of basis points between those two maturities that's the flattest since firing fireworks off in 2012. year to date a dollar/yen. most volatility's in the euro versus the yen. you can see this is flatlined. pay attention to than and follow me shortly, chicago pmi. david, back to you. >> thanks very much, rick santelli. if you've been pollfollowing my coverage at least of the successful auctions by the fcc you know as well it did end yesterday. that's right. the bidding in the so-called auctions spectrum by the fcc has officially concluded the government raising $44.9 billion. billion dollars. far more than anybody anticipated. >> wow. >> first responders supposed to get money from this they'll be doing just fine. maybe the rest used for deficit reduction, as i said with dividend coming in from fannie

mae, freddie mac who knows where else. the larger question is who won? how much did they spend? we may very well get that today from the fcc. if we don't get it today, we'll certainly get it monday. that is, we will be told by the fcc, the winning bidders for different spectrum that was up for auction. so we will be able to determine how much was spent by at&t how much by verizon, how much by t-mobile, how much if anything by dish and any other unexpected participants in this highly successful auction. but what we are not going to get is a great deal of information from the companies in question. while they may welcome out and confirm that the fcc's numbers are correct, and they did pay this, they are not going to be allowed, under the fcc rules to actually offer us any more information about their strategy, about what they were thinking, why they spent what

they spent, for another, let's call it at least ten days. that's due to the anti-collusion rules instituted for the auction by the fcc. the fcc says we still don't want you talking until we get the money. until we get i think it's a 20% deposit from you, within two weeks, then you can talk all you want. but until then we don't really want to hear from you. so we'll put out the numbers. we'll put out the winners. and then you've got to shut up until you finally can talk once the collect clears. we still may not know as much as we want to because this is a defining auction. in some ways it could be. it may give us a better sense as to what we're going to see from charlie ergen at dish whether verizon spent as much as people think or perhaps that up in's come down how much at&t spent. we may see some of these companies have to enter the capital markets or set up new lending facilities. at&t recently did last week to help finance the deals. >> what do you think it does for

capital expenditures for the companies? >> we heard from at&t coming down and verizon going up. >> i just think this is remarkable. when those thing started i was looking for maybe a quarter of that. >> yeah. numbers are huge. >> the government makes some money. >> they done chicago pmi. >> the number looks better than expected. 59.4 on january chicago purchasing managers survey. last month, 58.3 revised to 58.8. but is it a spectacular as it looks? it's solid. but keep in mind for november at 60.7. for october last year 64.5. so we hit the skids under 6 on still good over 50s expansion expansionachlts r expansionary. 10:50 eastern, have alice from

the group discuss the intricacies of the data set. back to you. >> thank you. we are, of course on ipo watch. waiting for shake shack to open for trading. you see the indication 37 to 39 now. we'll talk with the founder, danny meyer and the ceo randy garutti. dow's about flat. apple about to crack through an all-time high. back in a minute.

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enthusiasm on the floor among employees of shake shack, which has indicated 39 to 41. might explain some of the emotion that we're seeing here jim. >> yeah. 40 is too high. it doesn't matter. it's an emotional situation. emotional situations do not lend themselves to great investing but people want to own a share, they're going to own a share. who can stop them? i'm a friend of danny's, i'm not trying to knock anything. >> you're seeing reasonable. >> i have to. it's our job. no free passes.

no free passes. >> yeah. meantime, apple, as we mentioned, getting awfully close to all-time high. all-time intraday high. 119.84 the highest it's ever been. >> compare apple to shake shack. what does apple sell at for next year? 14. why does apple go higher? is it worst than the average company? >> by contrast what will shake shack's multiple be at 40 a share. >> infinite. >> approaching $700 billion market value is apple. >> apple is -- you know money managers are stymied because they know the law of large number but was also know that it's an inexpensive stock. you've got the watch. listen to visa gigantic. it's the future. what a year apple's going to have, it's the year of i pad. google said it's the year of youtube. amazon says it's the year of profit ability.

everybody's got the year up. what's the year for you. >> trying to figure that out. >> a jim memo. >> "stop trading" with jim in a moment. dow's down 42. but visa adding 100 points to the dow by itself. we'll be back in a moment. [woman] can it make a dentist appointment 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?

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time for kram somewhere "stop trading."." >> lost in this costco. costco paying a special dividend, they've got that much cash, want to return to shareholders ala google a year from now, my prediction. look at costco and look at amazon and recognize some of companies, consumer spent companies like apple. consumer's stronger than you think when you look at costco stronger than amazon stronger than netflix. friends on netflix, not on "seinfeld "seinfeld "seinfeld." people are spending on things not captured by aggregate numbers. there! >> you said it. >> on shake shack, you say 41. i'll see you 41 and raise you, i don't know 50. it doesn't matter anymore. >> 42 to 44 100% pop at these

levels? >> well, you know if you want it -- i'd rather get the burger. >> let's go get the burger. >> get theburger. >> where's my shake? >> "mad" tonight? >> why it's so stupid to trade when a company reports and puts out a release. talking about google. i cannot believe how wrong people are and how stupid people are. i am taking some people to task. the people who pulled the trigger, down 20 on google l. they're in my sights. >> most important question seahawks seahawks/patriots. >> it's 35-17, patriots. >> what? does your boy sherman know this. >> talking about not playing. my advice to r. sherman, i traded the day that my -- one of my kids was born and i regret that and will all my life. i just think that patriots have the best -- second best defense in the league after the

seahawks. if you only have 17 yards running and win a game it's the kraft year. >> hello gronk. >> i love the seahawks. >> see you for shake shack. we'll get consumer sentiment and shake shack in a moment.

good friday morning. welcome back to "squawk on the street." as we await for the first trade from shake shack observe at post 8. prices at 21 indicated 44 to 46. at these levels going up more than 100%. we'll talk to danny meyer and randy garutti in a little bit. i'm carl quintanilla with sara eisen, simon hobbs, david faber. dow is flat down 25. visa adding a bit. but will add less down the road once that 4 for 1 split becomes official. oil doing well above 45. breaking news here. consumer sentiment after chicago pmi out not too long ago. rick? >> well keep in mine that the mid-january read off the richter scale for michigan. so here we go.

98.1. last -- last month -- mid month, 98.2 stands. 98.2 is the best since january of '04. so the notion that we dipped by a tick isn't going to make much difference. so, very very solid number. and i think that we need to go no farther than one more to explain it along with the big consumer confident number that we had last look. and that is of course gasoline. 1.68 on ten-year note yields. it's 50 basis points down on the year and still in january speaks for itself. back to you. >> thank you for that. one more check here of shake shack, indicating 44 to 46 if you're not familiar with the burger chain, founded 11 years ago. 63 shacks around the world, 9 countries a concept they call fine casual. on a week where mcdonald's with all of its troubles switched

horses in ceos. we'll have first on cnbc shake shack founder danny meyer and randy garutti, the ceo joining us, once we get the first trade from ticker shak. >> let's egg checkcheck on the markets. dow and s&p struggling to hit positive territory. dow down 50 points. nasdaq a lift from surge in amazon shares after better than expected earnings. joining us morgan stanley's chief u.s. strategist adam parker. you know how the january barometer goes down month for january, down year. didn't happen last year but i think it happens 88% of the time. is this an omen? >> no, i think, to me, that's astrology. you need 10,000 year before you can get any statistical significance out of than i wouldn't marry myself to that stuff. you need to believe earnings are growing and that's what the key variable will be as we head through the rest of earnings season. >> you say earnings are growing. have you been disappointed with what you've seen so far? everyone from google to

microsoft to caterpillar affected by the strong dollar. by weaker oil prices. it's been somewhat negative. do you have you to revise down based on the fact that earnings has been sluggish so far? >> actually no numbers are coming in about what we expected. above the bottom of consensus expectation setting in. the good news is you had nine weeks ago a bottom number that looked like 14% earnings growth. all the way down to 6% growth. i think 6 is right. all ten sectors of the market have seen downward revisions. to me it will be certainly places in the consumer and other areas with lower input costs that will see upside later in the year. i leakike 6%. numbers are coming in where i expected. >> what you're saying what people are saying for the fourth quarter what we're reporting now from what's happened is above expectations. the issue is looking forward for

the rest of the year. i've got work here from lindsey bell at s&p capital iq. i think it's one of the most important things that happened this week. she's showing current estimates for 2015 a rise of 3.7. that's significantly below the 7.5 growth expected last year and it's well below the 12.2% growth that was expected for 2015 at the start of people writing those estimates some there's a huge pulldown on what the ceos are saying and what we can expect the rest of the year and that's a fundamental deterrent for a rally, isn't it? >> let's me give you points on that simon. there's been 39 full years of forward earnings from the sell side. 33 of those years, the january estimates were too high. the six years they were too low, all recession recoveries or the year after. everybody knows sell-side estimates can be too optimistic. on average during 39 years january expectations for 14%

growth and the actual growth was 6. numbers come down all year. what matters this year's earnings above last years earnings? what probability do you assign to bears. we're not recommending areas hardest hit, we don't like staples, machinery, chemicals, health care we're not recommending those areas because you want to play that relative revisions game. the consumer'surrency's going to hurt. 125 for 2015 i think they they're about right. three, four bucks downside currency and industrials too high. three, four bucks upside as the year transpires because there's a lot of places that benefit from lower rates from lower oil. >> energy shares are leading. but this has been a painful one. upgrading energy in december and it's hurting you like a packers' loss to the seahawks. when will energy companies rebound? you have to wait for the bottom in oil prices?

>> it's been okay. a slight net negative. but three prongs to the thesis. energy stocks are cyclical. all seven times in past they've gone down this much they outperformed six months later. you have to be early, buy them two, three months before the earnings revision bottom. you can't wait for them to bottom the third point, valuation. price-to-book, again it could be imparred but the most effective, the stocks are cheap. i think you've got to be buying them here on a belief that oil will be higher you know 12 18 months down the line. >> i want to ask you about gdp out this morning. a bit disappointing on the headline number 2.6. 4.3% increase in consumer spending is a hopeful sign. what do you think it tells us about the economy and the momentum heading into this year? >> look i think the u.s. economy's doing okay. biggest overweight in our portfolio is consumer discretionary because i think you'll see upwards revision.

i'm hedged with the energy bet. i think the economy in the u.s. is doing well to be honest with you. i think there's a reasonable chance that this will end up being a long economic expansion. we're probably in that dip buying mode unless we change our mine on the quarter behavior. >> i know you're bullish on the market for the next few years here. chief u.s. equity strategist at microsoft morgan stanley. >> all-time high for apple at 120. on a market cap basis, there have been shares outstanding that have been reduced. currently 703 billion, got to get back to 715 billion. that's as high as its been since december 1980. >> jim stewart will talk about the reversal in fortunes for apple. >> amazon in the spotlight, after blowing away analysts'

estimates the way surprise surge in estimate. shares real rally 10%. google failing to impress wall street with a revenue miss. the internet giant citing rising dollar and slowing growth in ad clicks. the stock up there as we showing at the moment 3%. let's bring in gene munster. >> hello. >> before we go further, what is the view on apple, give than apple is grabbing headlines. you cover that stock. >> investors are starting to understand product cycle is bigger and deeper than initially thought. one quick takeaway 17% global market shares for smartphones in the december quarter. if they apply that for the rest of 2015 that would apply 20% upside to the street numbers. i think that kind 0 math starting to res nature with investors and that's why the stock's moving higher.

>> what is your price target at moment gene? >> at $135. >> how do you feel about that? >> i feel very good. if you look at for example, march quarter, street's looking for 25% i phone growth. they did 46 in the december quarter. obviously the launch quarter. if they grow at a similar rate you'll see the stock move higher, in anticipation of that. the big picture is this. they haven't had a competitive offer in the samsung larger phone. they do now. they'll reap the benefits of that in the next year. >> talk about amazon. a lot of people are excited they've been able to prove the potential, lest anybody forget they can make profits if they wanted to. now that you've seen what they've come through with and the big surge in prime subscriptions, which is key. >> there was a sea change last night in terms of how the company's messaging its margin

profile going forward. that's been the critical issue for investors, getting their heads around how profitability will play out. the cfo mentioned that they've been in heavy investment cycle and been as in past tense, and more of a focus on productivity. productivity is basically code for margins. so since that's the first time they've talked about what that does is give us some optimism this isn't some roller coaster of margins we've had with amazon in the past few years. the amazon's more focused on profits, robots working on their behalf and that will benefit the stock going forward. >> today, amazon on track for its best day since april 2012. what does that mean for valuation? what does this margin change mean in terms of valuing the stock? >> it gives us more confidence to use an ebitda multiple in value. so our price target is $420. what we use is 17 multiple in

our 2016 ebitda. it's a lot of numbers. but the bottom line is given the greater focus on productivity, it gives us more comfort at using ebitda multiple, some investors say we're too early, this is a head fake. we don't think it is but that's how we get to 420. >> let me push back on that gene. even now, the suggestion that is the profitability could be short-lived. i think the expectations it could be $50 million profit to a loss of $450 million moving forward. they haven't said that they're going to abandon, for example, the china expansion. if bezos pushes in the other direction, your view could seem very temporary. >> well you know again, amazon could invest in a lot of different areas, it could impact profitability and that's investors' concern. i'm putting a lot of weight into the comments on the call that suggested they're going to be more focused on than our point, we think they have some undeniable leverage in the

model. i mentioned robotics. the other thing how fastly they've grown fulfillment, basically overbuilt. the combinations of two will create the higher margin even if amazon goes on these boondoggle spending adventures. >> as you've been talking, shake shack officially opened for trading a gain of 122%. $46.54 the last price, after pricing at 21. already increased 17 to 19. not bad for a hamburger stand that opened over ten years ago. took them five years to go from one location to their second location. and now unbelievable evaluation. >> the plans are ambitious, in terms of expanding beyond here ten locations per year some say that's conservative. obviously they're going to be using proceeds from the successful ipo on expanding and growing. the question, how it does out of new york. the brand is the strongest in manhattan and the financials are the strongest in manhattan as

well including the margin including the unit volumes. >> expect to open ten stores a year for the foreseeable future. they think probably -- 63 all around the world. burgers, if you haven't heard, the biggest dine-out segment. $72 billion in 2013 sales. pizza zaps pizza's the second biggest category, half of the size of burgers. talking about five guys and mcdonald's and shake shack and jack-in-the-box, there's a lot of room. white space they call it in the industry. >> this follows a number of other successful ipos and fast pops we had habit burger remember that? a 100%. they picked a good time in terms of category toe go public. fast casual hamburgers. >> this is clearly a hot area

because once you can establish a franchise brand that people want, your marginsen crease rapidly. the question is always after you get that initial bump up maybe one or two ways of franchisees switching other brands can you maintain momentum momentum? >> it's not a franchise-heavy model shake shack. >> i can't believe, with this cheerleading, they might not pivot on that model moving forward. i can't believe if the doors are batted down that they would not change that moving forward. >> we'll talk to danny meyer. his corporate philosophy keep the business as small theoreticry as he possibly can. that may change down the road. we'll talk to meyer, of course, and a tale of two decades how apple overtook microsoft and how it can avoid the same mistakes. jim stewart of "the new york times." how to invest in a super

bowl ad $4.5 million a spot. new record. we'll talk to arnold donald and of course with shake shack open danny meyer and randy garutti in a moment. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all? a simple unbiased stock score consolidated from the opinions of independent analysts...

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if you haven't heard, shake

shack is open for trade, priced at 21 currently trading 49.01. danny meyer, founder of shake shack, ceo of the union square hospitality group. >> danny, you have had hopes for this chain from the beginning but did you expect it today? >> we didn't have any dreams that today would ever come. we wanted to open a hot dog cart to help a cart in madison square park. when you put a great product together with amazing people with the heart you felt on the floor, these people are doing and it's our staff that this day is for. we're so excited. >> well danny, you know i love shake shack, and i've known you for a very long time and i'm very proud of our relationship. but does this put too much pressure on you? honestly, the stock supposed to come to 21 it went up all week. suddenly a valuation i don't know whether -- when we talk all

the time -- whether it isn't too much. >> i think it puts pressure on you. but randy garutti's just an exceptional ceo of shake shack. and what we do we've said this many times, we cook one burger at a time with one smile at a time. i don't know how you value that. >> hang on. forgive me if my math is wrong, but it's like 1.25 billion and you've got how many outlets. >> we've spoke to our staff, many never had a job-they started at shake shack. they were here on the floor of the new york stock exchange and we said you're going to see a loose of numbers and hear about a lot of numbers today. forget. this is about your hearts. >> what do you think, danny, for valuation of 1.75 billion for 63 restaurants? >> we're grateful for the people who love our bran. we've always tried to offer great value and for whatever reason, people love standing in line for these burgers.

>> it's true. >> maybe that translates to the stock, too. >> talk about where the growth is going to come from. same shack sales have slowed over time and it's largely about new stores is it not. >> it's largely about new stores. what's happening, there's a seismic shift in how people are eating today. people are trading up from qse. i know my kids and my kids' generation, they're not eating fast food. they want more. they expect more. we've been a part of leading that for the ten years, i think that people who understand this story, people now part of this family understand we have just gotten started. and this is a growth story for decades to come. >> do you worry about the brand is so strong in new york and the financials are stronger in new york taking that and opening ambitiously ten stores a year outside of new york. >> 234i7banyone who has been to our opening in chicago, atlanta, las vegas, dubai, for that matter felt that what we do look we're serving hamburgers. we're serving the most massive

fuel product in a world to a group of people expecting something different. we know that that's resonating around this couldn't interest and around the world. that's our goal. >> but it's not competition, even in the area you're playing in. i was in l.a., i went to in and out burger it's delicious. i'm a shake shack customer i love. five guys. i can go through a lot of name where you have competition. >> look at it this way, there is certainlied a trade up and arm's race for a lot of better burgers. what shake shack does, we put it altogether. we make it a place you can take a date. you can take your mom, you can have a beer. we just make it a place that is okay for every occasion. that's what makes it different. that's what people are guy buying into for the long term. >> mcdonald's is in the news. what happens if the ceo says i've got 36,000 restaurants that need a boost, please join me please work with me please do

something with me give me some of your secret sauce for a business that is thousands of times bigger than you. what would you say? he could make you very rich man. not that you're not already obviously. >> that would not be my motivation. >> would you rule it out. >> shake shack is about culture. i don't know how you can scale culture from 63 to 35,000 overnight. every time we open a new shake shack, the management team that opens it are stars who came from one of our other restaurants. and we've been able to consistently grow shake shacks where you walk in it feels different. we're going to grow at the proper pace. >> you think there may be something structurally wrong with a restaurant chain that is 63,000 restaurants, from what you're saying in the new world. >> i'm not a restaurant consultant. what we're going to do is as soon as the excitement is over, cooking one burger at a time. i'm so proud of the team. >> can you compensate the team

better. >> woo doughe do compensate them. >> so many who got them on the team are shareholders today. every single manager at shake shack, every one, got options today and is going to be a part of the story moving forward. that has got -- what got us here. that's our commitment as we go. >> also you have revenue sharing and you pay pretty much above industry norms, right. >> we do. >> every mark you're in. >> we do why president obama came to the shake shack in washington to give that man a pat on the back. >> i think he liked the burger too. >> what do you think about the consumer and what the consumer wants today? people say they want healthier. your burgers aren't healthier even than mcdonald's. >> consumers want pleasure. they want to feel good. they want it to taste good. and they don't want to deny themselves pleasure but when they go for a burger or go for a shake, they want to know that it

was carefully sourced, carefully made, and that's it. it's kind of like you know when i go out to get a steak, i can't do that every single night of my life but when i do it better be a good one, cooked by somebody who cared how that cow was raised. >> randy, i'm thinking about david mentions competition, i'm thinking of what a burger in and out, chains where people around the country may know them in their part of the world but not national chains, right? is shake shack going to be a national chain, these 450 shacks that you envision is that going to be nationwide? >> it should be. the brand power -- a unique thing happening. there's a reason we're on "saturday night live" on saturday night. the brand reached a beloved feeling around the world. we were born in the social media age. our people connect with us in a different way. i don't think distance really matters. i think it's about what you bring. when people feel right. >> what about margins nonnew

york shacks not what they are in the city. >> it's only one manhattan. what we've talked about moving forward, industry leading opportunity outside of new york and we're incredibly proud of that. isn't it nice to have an incredible base home here in new york that will help us grow from there. >> danny, you've been a successful restaurant oour for many years. it takes you a different level, stock price of 49 given your ownership stake, would you be tempted to sell shares to realize the enormous wealth you've gained as a result of shake shack hang on for years to come. >> i do everything for keeps. take a look at a zagat survey 3 of new york's favorite 6 restaurants are ours. one is 30 years old, one is 20 years old, gramercy tavern, and there's shake shack, 10 years old. we do things for keeps. that's how i'm looking at this.

>> you expect to be part of it for a very long period of time. >> absolutely. >> would you sell stock? >> i'll talk to my financial adviser. but that's not -- that's not what's on my mind today. >> congratulations. to your employees, fantastic work danny meyer. fantastic work randy. >> we're starving. >> i hear there's a vegetarian. >> the shroom burger it's got your name on it. >> danny, randy, congratulations. shake shack, currently $48.95. more "squawk on the street" back after a break. i am never getting married. never. psssssh. guaranteed. you picked a beautiful ring. thank you. we're never having kids. mmm-mmm.

breathe. i love it here. we are never moving to the suburbs. we are never getting one of those. we are never having another kid. i'm pregnant. i am never letting go. for all the nevers in life state farm is there.

getting breaking news this morning on greece. regarding the new prime minister's stance with his creditors. michelle caruso-cabrera has more on that. >> bring up the three-year yield for greece so you can see instant market reaction

approaching 20% as a result of this huge move. so here's what happened. the new finance minister has said that he's not going to seek an extension of the bailout process, past theth of february. that's an arcane piece of process. what you need to know about that, it's yet a more antagonistic stance than what they've taken already since coming into power just a week ago, just on monday. and you've seen yields rise throughout the week here. throwing down yet another gauntlet to say we're not even going to respect the process that you have set up when it comes to the greek bailout program, showing that these are going to be very very tense negotiations, which already started today with a representative from the european union arriving in athens to try to begin the discussion. back to you. >> i want to reframe this if i may. this is a negotiating tactic. this is not -- they're not breaking off negotiations with the troika. what they're saying we have a line in the sand it's february 28th, it remains a line in the sand and we will not ask you to

extend our bailout unless we get what we want. and that is an extension of the debt and maybe we'll give you structural reform. this is not a nuclear explosion for markets. this is simply part of a bruiser in the case of the finance minister the new finance minister stating his case before he tours europe rome paris, london monday tuesday, wednesday. >> i'm sure the people that bought the yield at 13% are thinking the same thing. >> i wanted to add value there. i thought it was worth while. >> i agree, yeah. >> part of negotiation. we have to get used to this it may not be necessary. >> i think -- i think the next step to watch to see what's happened with the banks because the capital outflows have been dramatic. we talk about, oh when are they going to come to some agreement? they may be forced or brought to their knees by the banking system if there's enough capital

flight and the ecb says we're not going to take it anymore. we'll have to see. another key, the most key player in the whole thing. >> thank you very much michelle. to both of your points, euro down a quarter of a percent. overseas tensions, a month after that massive interest rate increase, to stop the russian ruble from plummeting russia surprised the markets and lowered interest rates. the ruble has been slipping. strong dollar weak ruble. what is the central bank and the finance ministry and government trying to signal here jeff. >> reporter: i think they will be very pleased today because the central bankers managed to bring interest rates down two percentage points and effectively only seen 2% decline on the dollar/ruble rate here. we are down more than that. they think they have a window of opportunity that's been provided by the slower decline in the oil

price of late. that's also arrested some of the volatility that we've seen in the ruble. i spoke to the finance minister yesterday, and he said he thought it was about time rates came down and the central bank obviously keyed into that. the banking system will be delighted by this. i spoke to the ceo of vtb bank russia's second largest bank and he said it's time rates were lowered. let's listen. >> i'm not a support of high interest rate. i think the central banks should bring it down. it stays high for too long i think it will create a lot of problem. we expect already negative economic growth, gdp growth. >> reporter: bear in mind this is an economy in all sorts of trouble, low oil price, ruble volatility sanctions have just been extended by european foreign ministers. in the december data we saw

incomes contract more than 7% and wages fall nearly 5%. so a 2% move today on interest rates is not going to bail them out, but i think a lot of people here in moscow think at least we're heading in right direction now if we're after growth. >> thank you for that. when we return "the new york times" jim stewart on microsoft and apple. back in a couple of minutes.

on the heels of huge earnings shares of apple are hitting a new all-time high this morning. the company's market cap valued at $703 million. worth noting because shares outstanding have been reduced, apple surged past 715 to hit a new market cap high. technical stuff there joining us at post 9, pulitzer prize winning columnist, jim stewart. we got earnings from microsoft and the divergence of fortunes between the two. >> apple numbers you have to step back and say, wow, and then you know what more can you say? i was really struck by this comparison that this week and

today even more so, the market cap of apple is not only bigger than microsoft it double. microsoft once the biggest market cap company in the world. i thought it would be great to step back and say, how did this happen? how did apple surge so far ahead, once given up for dead, and how did microsoft, in a sense, falter? i thought the answers were really interesting. >> what did you conclude? a leadership issue. >> leadership is definitely part of. one striking thing of apple that is kind of unique its willingness to in fact destroy its own markets to get a bigger share of something else. i mean the -- it could have put a mode around the ipod and tried to protect that. no, it put music on the phones. ipod is gone. now the big screen iphone is threat. ing the ipad. you need an ipad if you get an iphone 6 plus? maybe not then don't seem to care. that is very unusual. this willingness to cannibalize

your own dominant product is is very unusual. i think microsoft had the opposite problem. put the mote around windows clung to the monopoly position and the world left the pc behind. >> only thing i would ask, now that we are in humongous numbers, whether it comes to apple's profits or revenues does the law after large numbers come in and make it hard to move the needle on growing. >> the answer is, yes and no. yes, i pointed this out, at this size you cannot have 15%, 20% average annual revenue growth every year or soon you're bigger than the world economy. an interesting thing about apple, it's either lucky or brill yn oriant or some combination of both, they targeted a huge market then have mid-teen share in the smartphone market. that's a call for microsoft. they have 95%, huge share of the pc operating system. how do you grow?

there is room to grow. and the numbers are big, but in relative terms, valuation looks quite reasonable. >> amazing how many pundits wanted to make a cheap phone for china. dealing with a population that doesn't make the amount of money in the states you've got to make a cheap phone. they went the opposite direction and that's what paid off. >> they experimented with the 5c it didn't do much. what apple realizes is their brand is a premium product. you produce something that's this good people everywhere will save their money, do whatever they have to do to get these things. it gives you a real competitive advantage. its think it's a smart strategy and one room for growth. the question is can they do it again? that's what everybody wants to know. of course, nobody can envision another anything like the iphone. on the other hand when microsoft was king of pc world, nobody could envision anything knocking out the pc. who knows what the future holds. >> do they benefit from the thak in they had a near-death

experience and that being apple, you know, from what was a height of success to almost bankruptcy? >> i think that's a good point. i think, yes, it did. near-death caused them to focus and did not take anything for granted. nothing but success, i think, reads complacency. that never happened to steve jobs. he preached this all along, never take anything for granted, don't assume because we're ahead we're always going to be. if we don't reinvent ourselves, somebody else will come along and blow us out of the water and that's been effective. >> near-death from a corporate standpoint and as he said at stanford in the speech knowing you're going to die changes your willingness -- >> isn't elephant in the room he's not there anymore and the question becomes whoever they recruit from rest of the world who are successful who may not have tasted failure, whether they can replicate that? >> that's true but you have to give tim cook credit. he decided to go ahead with the big screen iphone.

you know people told me jobs would never have done than that. he was hostile. there is a danger the big screen phone cannibalizes the ipad. cook seems willing to risk that this is the apple way, if this happens, kills the ipad so be it, we'll have a bigger and better product in its place. >> we'll read the column this weekend. dominic chu, a quick market flash here. >> two credit card companies on fire this morning. start with mastercard posted better than expected earnings on increased number -- amount of consumer spending. during the quarter the company repurchased 2.1 million shares of its own stock. shares up 2% this morning and then after the bell late last night, visa came out with their number beating estimate business 4 cents per share. the company announced a 4 for 1 stock plit.split, responsible for 90 points of the overall gain --

move in the market. we're watching those stocks closely. back over to you. >> dom, thank you very much. coming up carnival's ceo will join us in a cnbc exclusiveness view giving away a cruise a year for life as part of its super bowl campaign. that's after this break.

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on sunday the cruise giant carnival will be advertising during super bowl for the very first time. as part of the its almost two-year recovery. our parent nbc selling out of super bowl ad inventory at an average price of $430 million. that's more than fox managed to muster last year. joining us for an exclusive interview, arnold donald ceo of carnival. welcome back to the program. nice to see you.

>> good morning, simon. always good to be with you. >> so there are four adverts on line customers can see and vote which one goes through for an airing sunday night. why have you decided to make the break. >> why spend this sort of money now? >> well first of all the super bowl's the biggest stage there is. we have four spots that guests and future guests can vote on. our goal is to get more people to introduce them to the great vacation experience and a great vacation value that cruising is and it represents all nine of our brands. >> yeah. >> two of those spots have already been featured. go ahead. >> i didn't mean to interrupt you. there's a delay here. just on this -- we know for example, just to be more current about it there is brutal pricing, tell me what you're finding in the caribbean because royal caribbean stock did so badly yesterday. too many ships in the caribbean. are you sure it's a good idea to stick with the idea of advertising all nine brands an

industry push? i saw an add, offering 50% off a second traveler, $200 to spend. shouldn't you you be taking them on directly? >> well you know not really. our bigger competition, of course, is people who have never cruised before. it's not the other cruise lines. so we would like them to be successful. in terms of the caribbean, it's a little crowded now but it will ease up late in the second quarter in the rest of the year. but the reality for these spots, cruise versions one of the spots, one of the major networks, had a show featuring the greatest super bowl commercials ever and highlighted that spot. another major publication, highlighted one of other spots getaway, that highlighted as perhaps the best super bowl commercial. we may not run either one of those. we have two spots, that would encourage all of the voters to be introduced to the greatest

experience of a vacation that a cruise really is. >> so much inventory, so much crowding on the u.s. market. it is imperative for all of you to create the impression that you're doing more in china, putting supply in china because it's growing so fast. it remind me a little bit of in the dotcom area everybody had to have an internet prens.sence. given that you have 100 ships what will move the needle do you any in china. >> china's already moving. we have four ships home ported in change high. we're profitable in china. we've signed a second memo of understanding with a major entity in china, the merchant group. we're excited about it. we're successful there today. we're the largest in china. looking forward to additional growth. but we're also looking forward to growth in europe and the united states and continued growth in the caribbean.

so, we're excited about the cruise business. as you know simon, we were up 25% in our eps, 14 over 13 and our guidance to be up another 25% in '15 over '14. we're headed fast and hard towards double digit return of investor capital in the next three to four years. >> as far as sunday seahawks or patriots? >> well the seattle seahawks princess cruise lines the official cruise line of the seattle saw hawks. we have to be biased since princess is one of our brands. but we love our -- those who cruise from the northeast patriot fans and looking forward to a great game. more importantly, a great experience with the commercial exciting people about cruising. >> good to see you. thank you for your time arnold. us. >> take care. >> enjoy the game. i hope you get to go. >> coming up at 11:00 a.m. mitt romney will be holding a conference call with his supporters to provide an update on his decision for 2016.

we'll bring you all the headlines on "squawk alley."

welcome back to squawk on the street. rick santelli with alex. we will dig deeper in chicago's

ism report. one thing i can tell you look january to january which encompasses 13 data points eight of those in the past have had a 60 handle. this number the best since november close to 60 but a whisker under it may look good and it is good. your comments of the report for me. >> this is another steady solid report basically we reversed some of the weakness in december. we had the barometer up 0.6, 59.4, best since november new order backlogs and production up, that's a tryifectatrifecta, we like to see that since november. that naturally pulling employment up. up 3.7 to 60.1 it's best since november 2013. now what i am hearing about employment is it just continues to be contingent work force, highly flexible. a lot of the part-time workers going to be permanent workers going to contract actual work.

we're getting like this big paradigm shift where permanent hiring is not so big anymore. >> you think some of that has to do with aca, any mention of that in the response? >> not so much. the other thing, supplier deliveries couny sies down a little bit but the purchasers take that as a positive. >> to me if i look at chicago and look at the gdp report and i look at several reports, housing, what i find is is that we still have this surge and then distribution. we have a lot of crazy wild starts but it's the sustainability many investors are looking for and the u.s. economy that's not here. to me inventories drop of 15.4 to 40.1 you told me that's the lowest since july of '13, be supplier delivery times down you say it's a positive and it is, but it's a distribution. we don't keep the momentum. your thoughts? >> right. i looked at that number and it was the second biggest drop on record and you don't really get -- >> on inventories. >> we don't get those kind of moves. this was by design.

we're in a cyclical pat were we want to get those kind of goods out the door. >> we have breaking news to carl quintanilla. >> we are getting word mitt romney is telling supporters he will not run in 2016. eamon javers in washington with more on that. >> that's right. nbc news learned that mitt romney is telling folks he will not run for president in 2016. that puts the end to a little boom that we've had here of mitt romney news. a lot of people speculating he might run and this morning, we heard that he was convening a conference call at 11:00 a.m. for his close supporters to tell them what his decision has been. nbc news is learning that the decision is not to run. that will clear the field now in the republican -- on she republican side for jeb bush of florida to make his move. they were pulling from the same group of donors and particularly staffers. we saw the key romney aide from iowa report to the bush camp earlier this week. that was a key defection.

carl clearly mitt romney now clearing the way, jeb bush looks to be the big winner of this decision this morning. >> all right. thanks very much. maybe ann romney got her way when she said, no no no. thank you. more on amazon google apple, big movers in today's sessions. "squawk alley" all over it. we're back in two.

good morning. it is 8:00 at amazon headquarters in washington 11:00 a.m. on wall street where today the new york stock exchange has been rebranded the new york shack exchange for shake shack, kwa"squawk alley" is live. ♪ shake your money maker ♪ ♪ you know i got it if you want to come get it stand next to the money ♪ ♪ shake your money maker ♪ ♪ you know i got it if you want to come get it stand next to the money like hey hey hey ♪ and good friday morning. joining us nick bilton tech columnist for "the new york times," along with eric sheridan

internet interactive entertainment analyst with ubs. we'll get to you on a busy day, kayla tausche, jon fortt and i on set, watching a market that is lower, but being buoyed by thes like of as visa amazon and apple. all-time high for apple at 119, almost $120 a share, going back to the ipo in december of 1980. >> yeah. and the word of the earnings season in tech is ecosystem i think, and apple is the standout here. they are the ones who really have this combination of retail of