>> live from the most powerful city in the world, new york, this is squawk box. >> good morning everybody. welcome to squawk box here on cnbc. today's big global market story has to be oil. among the catalyst for the increase in prices. by the way we're talking about oil above $50 which is a big deal if you have been watching the he declines we've seen in the last couple of months but we're still talking about wti sitting at $50.98. it's up $1.41 from yesterday. analysts reporting to energy giants cutting capital expenditures as part of the reason for the recent gains and reducing rig count as well. the latest news comes from bp. the british oil giant announcing it would slash it's capital expenditure by 13% to $20 billion. we'll hear more from the company's ceo in a minute but this is what we heard from all the big oil companies and the little oil companies too. >> yeah on the way down i heard that. but now that's why it's going

up. we'll come up with anything won't we? >> it's outrageous. >> i'm not paying $51. >> that looks like a little huffington there. >> it's the other lady. >> yeah. >> she used to go to buffet's thing all the time. >> oh i know who wrour talking about. >> it's outrageous. >> there you go. >> in the meantime let's tell you about other big stories to watch this morning. the nation's auto makers will be reporting january sales. they'll drive demand for pick ups and suvs in all of this. also other major companies. and we'll be hearing this morning and disney and chipotle interactive. one report of note december factory orders will be released at 10:00 a.m. eastern time. >> here are some of today's

stocks to watch. the wall street journal reports staples and office depot are in advanced talks to merge. no word on the proposed terms and activist investor starboard called for a deal last month. utx, i don't know why we need two of them. >> tint we lose the other one already? >> office max? whatever happened to office max? they're now part of office depot. >> my life did not change. at all. >> a pair of scissor is going to cost you a lot of money when this is all over. >> no you have amazon still. >> i don't know if you can gouge office supplies really. what do you need things to hold paper together for. >> it's not a paperless society. we looked around our set. >> there's paper and staples in there. >> these are the guests on the show? >> yeah. >> we have all of this information about the guests that are -- >> if only you knew ahead of time. >> are you kidding me? how do you act like a viewer that it's new information if you

already know all the information? it seems to be more spontaneous if you don't prepare at all. and natural. >> that's why you're so good at your job. >> that's why i'm so good. utx is increasing it's dividend by 9%. that raises to 64 cents from 59. i was going to quickly give you a yield on that. what's it yielding now? what was it yielding before? was it a yield stock or not? yielding 2%. so better than that and shares of rent-a-center. i saw this last night. down 15%. the company posting quarterly results. it fell short of estimates while also issuing weak full year guidance and cliffs natural resources getting a boost. the mining firms earnings held by a 26% jump in u.s. iron ore sales. shares of computer hardware maker stratsys slammed.

cutting it's 2014 profit view for a second time also warning the 2015 revenue forecast is going to be short of where wall street was at this point. >> we should also tell you about other news from a couple of big nshlg names. fourth quarter results fell short of wall street's expectations. company was dealing with a collapse in kudcrude prices. bp's results were better than expected thanks to downstream results. the company is cutting it's capital spending by 20%. the ceo sat down with cnbc this morning to talk about the results and the overall oil market. >> i think it's just going to take time. it could be a long time. u.s. production is still growing. chinese demand of course has great growth in china. not as high as it was. we have stock levels filling up all over the world. tanks are filling up. it won't be long before we see people putting them in ships. that takes a long time to work

it's way off. >> dudley also says the dividend is firmly established as the first priority within the financial frame work of the company. >> australia's central bank cutting it's cash rate to a low of 2.25%. breaking an 18 month break on stimulus. we're going to talk about european markets because they are higher today on news that greece is softening it's stance on a debt write down. michelle is here. >> so the big headline is greece backs down. the asterik is greece backs down on some things. a lot of market participants think it's why the dow moved 150 points in the last hour. this news comes as the finance minister was in -- >> wow. >> i like the way you say that. >> you're not used to that now? >> you saying things correctly?

if i said that we'd need a delay. >> sensor. >> please look at this video. >> the markets were focused -- i wanted you to see what he was wearing because twitter was obsessed with what he was wearing. >> guy on the right. >> the guy on the right. >> he showed up. >> one more time. >> slow. [ inaudible ] >> yeah the sensor is -- >> be in the headlines at 7:00. >> twitter was obsessed with what he was wearing. >> little casual. >> just like this country, all right. >> a little aol time warner. >> that worked out. >> as he's in london he gives an interview to the ft and he said the big headline is they're no longer going to demand a full write down of the debt. they wanted it written down by 50% the debt they owed to other countries. instead he's going to propose a

swap where they give the other european countries a new bond linked to gdp growth in greece. it's something we've talked about on the show before. that's the one big move that he's made. he still wants the ecb to reprofile the debt that they owe to the ecb. that's going to be incredibly difficult. >> even though this is a concession and we have talked about this before you want bonds linked to growth in greece, that might never happen so it might be the same thing as basically writing this off. is this palatable? >> so that would be the second concession that we haven't heard much about which is the reforms that they supposedly want to do are not seen as reforms. they want to reinstate public workers and rage the minimum wage and salaries and pensions et cetera et cetera. that would be the next thing we have to see them back down on. we haven't seen that yet. however, they do have a habit now in the last several days of backing down because this guy we just showed you had been telling

people that when it came time in july and august. the prime minister of the country came out and said don't worry. did this over the weekend. we're going to pay back the right. so trying to calm everybody down because their banks were under a lot of pressure. if you look at greece's three year yield which is the best way to look at greece at this point you can see that the number of the yield had gone to 20% due to the big fears we had seen. >> on a three year. >> up from 10% before the election and now today is back down. you can see around to just 18%. >> i know he's been promising they'll pay back the ecb and the private investors. >> and the imf. >> who gets hosed in that deal. >> the other european partners and taxpayers. other countries that extended bilateral loans to greece during the crisis direct country to country loans that's where they

want the write down and that's who would lose. the other european taxpayers. >> how does that play in germany? >> so that's going to be a lot easier because for whatever reason they think the populations in europe don't understand if it takes me longer to pay you back with a lower interest rate you're losing money. we understand that you're not getting paid back. we understand this intuitivety. it's easier than a 30 year higher interest rate or whatever. they don't have to say that there was actual write down. that they forgave dprees's debt. instead they're giving them longer to pay it back. >> kind of like savers in this country. >> thank you. >> thank you. >> that worked well. >> one thing, remember greek debt is complicated. there's all different kinds of

it. do we have the wall chart we can show you? the biggest amount they have, nearly 200 billion to their other european partners. they're 24 billion to the imf and then 38 billion to the private sector. the fourth cube in from the right. that's whenever we show you the chart what is the greek yield is doing it reflects that pile there. that is the only tradeable debt in that big pile. the 38 billion of the private sector four cubes to the right. that's the only stuff that actually trades. they also reiterated don't worry we're going to pay that back. they reiterated that. still when you look at a yield of 17% on a three year that tells you that people are still worried it could be a possible. >> they are? what are the chances now? >> i still think like 20 or 30%. >> that's it huh? >> you could have a banking accident because the ecb could cut them off and then you're at a situation where the greek population has to take out about

100 euros a day and can't transfer any money like a little more than a year ago and then you have to decide are you going to actually buckle to all the demands or print your own money? >> we're pulling for them to stay in right? >> i'm not pulling one way or another. >> it's not because i like to watch the world burn it's because the euro experiment is just like a joke. i can't imagine it ever works. >> so many mistakes along the way. >> we need to hope for a positive outcome for all of us you don't care. and then we're not happy they elected a full on socialist in greece. >> do you know what the prime minister named his son? >> ernesto. after a murder. >> yeah and really admires the revolution in cuba even though the people in cuba are living worse -- in what way does he admire? >> i asked him how on earth can

you see what happened to the soviet union and what's happening in cuba and believe in socialism. they say that wasn't real socialism because it wasn't a democracy. >> you should be happy. >> i'm thrilled. i take that as a compliment. >> you know. >> to me that's great company. >> you don't have an answer for me. >> we have to move somewhere. we have to go. >> nice to see you this morning. >> have you got any plane tickets right now? >> no but we have plans. visas. >> you do? >> yeah. >> but at this point you don't -- >> i thought i would have to be in greece around february 28th. the way they're back pedaling in the last couple of days we may not get there. >> that's good news for people

that are hoping for some calm. >> let's check on the markets this morning. the futures are higher. we saw big gains at the end of yesterday's session. the dow traded in 330 point range. earlier in the day it was down 127 points because of weak numbers from ism. get help later on by what michelle was talking about. by the end of the day the dow was up almost 200 points and this morning the dow pu tours are up by about 66 points. nasdaq is up by 16.5. in europe and the early trade there's also green arrows there. you'll see that in france and in london and in germany the markets all up by better than 1%. the greek market up by about 9%. in asia you'll see that things ended higher in china. the nikkei was down by about 1.25%. oil prices again a very big

story we have been watching. rebounding above $50. now trading at 5142. the ten year note looks like it is yielding 1.717%. slightly higher yield than yesterday at this time. it looks like the dollar at least at this point is down across the board dollar yen is at 11735 and gold prices at least at this point look like they are up by about $4.80. $1,281. >> i wonder if the ten year starts, the yield starts rising. >> is it because of the oil linkage? >> i wonder if all of these things got so extended and that we looked at every day -- i wonder if you see some other things but i also wonder whether people that made a little money from 46 back to 51, are they covering? it is going back to 70. >> if you talk to some of the

major oil companies they're planning for oil in the $50 range for years. >> we can only hope. stocks looking to build on monday's gains. the major averages all closing up around 1% or more. investors now starting a countdown to friday's big jobs report. it's always big every month. continue to keep an eye on crude as we said is back above 50. here with us to pick up the pace ben pace. chief investment officer and partner at hpn partners and michelle myer that does not run yahoo! >> no she doesn't. >> i still don't. >> maybe one day. >> to make it endlessly confusing, who is that that runs yahoo! now. >> marissa myer. >> you're michelle myer. >> i am. >> well you have absolutely nothing to do with her. >> maybe i do and i just don't know it. >> what do you think about the aol deal?

do you think they should merge or what? >> she is u.s. economist at bank of america global research. so we have so many things to talk to both of you ben i'll start with you. 200 points yesterday. partly because of greece and partly maybe because of oil. has the market seen enough sideways action and you can make gains in 2015? >> no we have seen over the last three years, we haven't seen a full correction. everybody is waiting for that but we've seen these 4 to 5% pull backs that get cash off the sideline. maybe we're seeing a little bit more than that but we are nervous this year. there's other issues. there's geo political issues and earnings slow down that may bring about the 10% correction but we think this is a secular long-term bull market and that should be used more as buying opportunities than anything. >> you feel the same way? >> the economy is certainly on a

healthier footing to be consistent with greater revenue growth and a stronger market. the disconnect is on the growth side the numbers are continuing to come out strong. around 3% gdp growth. the challenge for the economy is the struggle with disinflationary risks. that's what the issue is and that's what is probably the bigger theme for the markets is this concern about continued low or even disinflation. >> i just don't understand why you're saying the 3% is the norm for gdp. didn't we only have one print above 3%. last year was 2.6 when you added it up. >> q-4 came in at 2.6%. we're tracking above that. q-3 came in at 5% and q-2 came in above 3% as well. >> first quarter. >> first quarter was a negative. >> see that was negative. >> because you had a pay back.

>> i think we'll be around 3% as well. the data that's come in is all kind of adding up to about a 3% economy. >> even though we won't see that fuelled by profit growth because that's going to be basically -- is it going to be flat with last year because of the oil sector? >> not flat but slightly up we're thinking. do you know what we're thinking about earnings? you saw the bad of strong dollar and lower oil prices. the energy analysts were quick to increase estimates. >> the other stuff takes longer. >> it takes awhile. the analysts there are just waiting for corporate guidance. corporations are going to have an idea soon of the benefit of that so we think that earnings estimates are going to come down and stay down. we're thinking 122, 123 for the s&p 500 which is slightly higher than what this year will probably check in at and that will allow multiples to expand a little bit. >> the fed must be thinking this and hoping for this with their

fingers crossed. >> still talk about mid year. our thought is if they delay it will be september and they're going to wait for numbers but maybe they'll push that out a little bit. we're still saying officially june. >> mid year seems a bit challenging at this point because they have to start signaling to the markets probably by march. >> you mean it's challenging to do it by mid year? >> i think so. >> we may go up a quarter but do we want everyone to be ready to go up a quarter. >> i think in terms of what yellen is communicating and what se thinks about the risk profile it's the case that she's in risk management mode and she cannot check all the boxes that the economy can handle. >> that goes back to lloyd's point. from a risk management perspective that's what the fed should be doing. so maybe it's an argument they can understand. >> he likes lower interest rates. >> go slow. >> he also wants a steeper

curve. >> does he? >> yeah. >> who doesn't like -- that's what i was saying. the fed is afraid to say these spoiled brats for six years had all of this free money. >> all the move in the market with that initial move. >> when the first rate hike comes it doesn't matter how low or how long. >> the adjustment is going to take place then. >> just like it is unprecedented the pull back is going to be just as unprecedented. >> you think it will be more. >> it should be worse on the way back. >> that sign of tapering a couple of years ago. look at what happened to rates. they shot up 100 basis points in what seemed like five minutes and you had that tantrum. a really exposed duration risk in portfolios and that was a lesson the fed took. but yeah joe i agree weaning ourselves off of this addiction to monetary ease is something

that i am looking forward to. >> but was the lesson that they actually have to do it slow or was the lesson that look at what it is and maybe we should rip the band-aid. >> no. >> maybe they're going to realize. >> i think think the lesson is more for portfolio positioning to make sure that you don't have a lot of duration risk and portfolios. your bond positions are fine. you know what your average maturity is. a lot of people ease into equities and they're the ones that could get hit if you see another bump up in the yield curve. >> okay we're done: do you have a final comment? >> i'm going to pass on that. >> pass. >> it was a good move. seemed like a good move. >> the spin off? >> yeah why not. >> hey, you did it. if you did it yourself. >> congratulations to me. >> koujous move. >> all right. >> thank you. >> she died her hair or something. >> i don't know what's going on. >> when we come back this morning we have big news today for fans of disney's hit frozen.

plus word this morning that the fec is getting closer to imposing strong rules. a lot of media news when we return but first take a look at this date back in history. 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.

welcome back to squawk box. alex wallace joins us from the weather channel. it wasn't too bad alex. i didn't see any black ice or anything. >> well, that's really good to hear but we still have to be careful. there's still some areas where of course anything that was on the ground may be on the frozen side so still have to be careful here through this morning. you can see the temperatures still very cold expected for us today. new york's 26 degrees. that's all your manage. the warm spot is going to be down around d.c. near 40 degrees but even there still below average. now tomorrow a little bit of a warm up for some of us. yeah we'll get up to upper 30s around pittsburgh but look by thursday quickly we see that change in cold air comes in back to the eastern lakes interior northeast and eventually we'll see that cold air spread toward the east coast for friday. so a little warm up and then things chill right back down and the potential for more snow. here's what the set up is for us through midweek. cold air with a big dip in the jet stream and riding along our

storm track that jet stream will be a storm system that will quickly move toward the south and east and along it's path will spread in a bit of snow. starting today across the northern plains midwest region and places like minneapolis and chicago seeing a lot of snow. then we'll see it press it's way into new england moving into tomorrow. the good news at least with this particular system it's not going to dump a ton of snow. along it's path 1 to maybe up to 3 inches of snow but for some of these areas that have seen 2, 3, 4 feet of snow over the last couple of weeks we don't want to see anymore. guys back to you. >> thank you for that. talking about snow and frozenness we got a sneak peek of frozen fever it's a seven minute short from the animated hit musical in 2013. the latest story line will show in theaters before disney's live

action cinderella. elsa will be throwing anna a birthday party but then comes down with a gold and that's when as you imagine surprising things happen. a lot of kids i'm sure if they weren't going to see the live action cinderella will be running to see the seven minutes before unless that shows up online first. >> i guess somehow it winds up on youtube. >> before live action cinderella. >> or at least as soon as live action cinderella hits. somebody will video tape it. >> somebody will video tape it but it's going to be a moment i'm sure. >> it is. in other media news the wall street journal reports the fcc is close to proposal strong net neutrality rules. he is said to be going fibromyalgia a significant expansion of the agency's power to regulate broadband providers. the fcc would be trading firms like telecommunications companies and would subject them to stronger rules especially

when it comes to how they manage traffics on their networks. this is something we have been signaling. he mentioned this has been the direction. >> it's a bit of a back and forth on it. we had parsons that thought it wasn't going to go this far. >> but randall the last time we talked to him it was a very different stance. they hoped they could reach a compromise. the last time we talked to him he said this was going to be going through the court system for years to come. >> hopefully your sort of indeering about whether there are independent agencies versus -- >> can you believe that? >> he said the same thing. he thought wheeler would have to step away from it. >> i thought wheeler wasn't going to go this far on it. >> the good news by the way -- >> it's embarrassing for him. >> even though they're talking

about the title two issue they will still allow these deals where netflix already made deals with comcast and verizon and others so some deals can still happen. the distinction is they'll be regulated in a way they were now. >> it almost reminds me of when they did the credit card thing. >> it's obvious where it's coming down. it's like saying george h.w. bush would have been elected again. if he was able to pull greenspan to lower rates. >> i thought for sure he would have to take a step back just to make it look like there is independence. >> what i am seeing in today's article is the legislative action that the republican controlled congress is likely to

propose. they were already trying to figure out ways of legislatively challenging it. that's one of the reasons i say go to title 2. that's one thing you really can't get around theoretically. >> we will see what happens. >> we will. >> >> what else is coming up? >> the fierce fight. this is becky's favorite story. a great guy with a great book coming up. the fierce fight over the 529 plans. president obama walking back his tax proposal but the debate raising new questions about who should be using the savings set up? we'll talk to the author about that. he just wrote that big piece. he thinks that you should tell your children how much money you make. and we should talk about why he thinks that. first as we head into a break a look at yesterday's s&p 500 winners and losers. we're back in just a moment.

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a new investing and banking experience with personalized guidance and online tools. visit a branch, call or go online today. ♪ >> good morning. welcome back to squawk box here on cnbc. i'm joe kernen with becky quick and andrew ross sorkin. alibaba teaming up with lending club. they'll office financing to u.s. businesses that want to buy from

chi niez chinese suppliers. apple wants to convert a failed sapphire plant in arizona and at&t is selling data centers worth about 2 billion. this is the latest sale by the company which has been shedding i assume assets. no one wants to shred assets purposefully. do they? i would think that that -- you would rye -- >> reading the prompter. >> don't you assume that things are going to be -- >> typo. >> if they tell me that at&t has been shredding assets we need to talk to randall and ask him whether that was part -- >> you're right. you were smart. you saw it shedding. >> i am smart? >> you are smart. >> we're going to talk money and kids right now. president obama's 529 plan flip flopped igniting a fierce debate about how americans are saving for country. ron tackled the issue in his

weekly column for the new york times. also a new book out today. it's called the opposite of spoiled. raising kids who are grounded generous and smart about money. we thank you for being here. let's start with 529s and then another heat dead bait to have. but given the president's flip flop do you have any anxiety on investing money in the 529s? meaning down the road do you think somebody in washington may change the structure of these deals? >> all the somebodies in washington have learned their lesson from this incident that you do not mess with parents college savings plans ever again ever. >> so once it's out there. >> she was very upset about this. >> well, look i just think it's important more than anything if you start talking about changing college plans it throws things into flux. it makes people more reluctant to put money into these plans and studies have shown if you are saving for your child for college that child is much more likely even if it's only a small

amount that winds up in the account they're much more likely to go to college because they know that's the plan. they know it for a long period of time. >> i think that's absolutely true but what i think happened here is this hit people in an emotional place. it's one thing to go messing around with retirement plans or other taxes that hit individual grown ups but when you start changing the rules for my kid's college savings account and i have invested a lot of money. i have made sacrifices and then it looks to me like you're trying to take money from my children. >> you're changing the rules after the fact. i have to say on twitter somebody pointed out a good point if they'll throw out the idea of 529 savings changes being changed how safe do you feel about your 401(k) plan. people said it's your own money. it's not a pension you're relying on somebody else to give for you but if you change the rules on that you're in the same position. >> i worry about these things too. i particularly worry about it with the roth iras but i think

we learned a lesson here where let's remember what this was. this was not even a trial balloon. they knew that the broader package of tax cuts and tax raises and changes almost had no chance of passing and this was a little tiny piece of it. >> that's why it's even stupider. >> exactly. >> it was never going to happen and yet there was this up roar and he had to go on the front page of the new york times to say we're not going to do this thing. >> it was stated in the wall street journal and it's not to be partisan in the issue but they made the point that sooner or later the president is going -- you can't tax only rich people to do all the things he wants to do and you can say i'm never going to raise taxes on the middle class but sooner or later you need to get down to people that are considered middle class for all the spending plans that they have. you can take 100% of the 1%'s money and it's not enough to do what you want to do.

so it's going to come home to roost. people that benefit from the 529s, are they what? the upper what 20%? >> if you look at the gao number. >> is it 20% of income? >> but it's outdated i think too. >> it's been outdated by a couple of years but as the markets have grown. >> 70% are for people making $200,000 or less. >> of unit accounts. >> so there's a debate. if you keep these accounts available it will encourage more people to save. >> what's the money? 20%? we talk about 1%ers. >> there are different -- >> the top 10 to 20%. >> those people he wants to tax more. >> let me ask you a different question because this was the debate we were having before you came on. >> we weren't debating this. >> i was debating it. >> in yourself. you're conflicted or something. >> i want to do this. he has written this book and one of the main thesis in the book is that you should tell your children how much money you make. >> they don even know what money

is anyway to understand exactly what you're talking about. >> in my family i still to this day could not really tell you how much money my parents made or grandparents. i would try by the way. i would try to find out and nobody would ever tell me. >> did growing up in scarsdale did that give you a clue at all that you were wealthy? >> i knew we were doing okay. >> andrew you were rich. you didn't have a spoon, you had a ladel up there. you're from scarsdale. let me paint you a little picture. >> we did fine. >> you had money. you're rich. >> but i didn't know -- >> you're still rich. you're richer now than you were. >> i didn't know what the numbers were. i still don't know what the numbers are. >> they're large. >> the reasons for telling your kids how much you make are? >> i think it's important for kids to know what it is that it actually takes to maintain a scarsdale life style. >> a lot. >> it's not when they're little kids. >> what's the age? >> in their teens. >> but only after ten years of making them ready.

>> how old? 13 14 15. >> depends on the kid and i think girls are usually ready earlier than boys but between 13 and 17 most kids are ready. >> you give them the exact numbers. >> but only after you have spent years working on allowance and introducing them to the family budget and all the things that you spend and save. what you give away. what it takes to maintain the life that you have. yes then by the time they're teenagers they ought to know. >> they have a better understanding as they go out on their own. >> the black box. >> remember that we're asking kids at the age of 16 or 17 to make six figure decisions about college. this is lunacy but somehow in the last 10 or 20 years we have gotten to a number that high. two-thirds of kids are graduating with student loan debt. we're asking them to go into hoc at the age of 16 or 17 to make those decisions before we have given them any context. >> i'm going to make it more complicated. we have viewer who is forget about scarsdale rich are in a

completely different sphere given what they do with ceo titles and other things. if you make 5, 20 25, 30 $100 million a year and we have viewers that do that should they tell their -- i mean some of their kids can probably read about it in the papers but how do you have that conversation? >> well, first of all, if you think they haven't figured out a lot of this you're sorely mistaken because they are googling your name and your address. they are picking up the zillow estimate of the $4 million house. not to pick on people that live there. but zillow is the first thing that pops up when kids google their address. >> didn't you ever ask the footman, the first footman or the second footman or the valet when you were -- you never asked anyone. >> i would needle him all the time about this and he just -- he shutdown. >> i'd just come out and ask them. >> i used to try to bribe them.

give them a little extra cash. >> from out of the trust fund. >> still didn't tell me. >> still didn't know you had money. >> i couldn't figure out the number. >> scarsdale. >> yeah. >> i'm going to take you to this side of cincinnati some day. who else did that? people always play up their -- i was fine. i'm kidding. neither were you. >> no. >> you gave me a great excuse for joe to rib me this morning. we appreciate it. the book is called the opposite of spoiled. go out and get it. it's a fascinating -- >> mommy, how much money do we have? mommy? >> ron lieber everybody, john kernen by the way. >> it's a ladle not a spoon. that holds more doesn't it? >> it's also silver? >> silver plated.

>> totally stealing your line. >> use it. >> i steal all mine. coming up a story for our loyal viewers. i'm so happy. i can't believe this because i've never tried to run a marathon and i have been right all along. details on a new study that says when it comes to jogging, less is more. it's like music to my ears. ♪

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teens. but first check out some of the most-clicked stories on cnbc.com. we're back in just a moment. ♪

♪ we're in the chairs.

to be perfectly honest with you -- >> you're not perfectly honest with me normally? >> i try to be. but i always thought the human body was not designed to run 26 miles. >> i know what happened to the first marathoner. he died when he got to the end of the race. >> the very first guy, he yelled -- he finished -- he was an ahenian and then he yelled niek key and then died. i did always sort of think that that's a lot of strain especially training for it. and we think well that's just what doesn't kill you makes you stronger, but isn't there something to the notion that you put a lot of miles on a car, doesn't the engine get sort of worn out and used? so i have always just run three times a week maybe four.

i've slowly gotten down to where to be comfortable where i just don't want to -- where i can just pace going next time again. the endorphins help the first time. 35 minutes, does three miles. that's exact will i what you should do according to the study bhop knows whether that's going to be revised. but what it says is that those people who do that live a lot longer than the sedentary couch potatoes but people that do the marathons at the same death rate at the people who sit on the couch. so all this time that you're out there early in the morning, going god this is so painful, oh, my knees. the person sitting eating on the couch has the same mortality rate. >> is it just about running or any vigorous exercise? >> are you making this some kind of a sex thing? >> no. no! where is your brain? >> andrew was wondering because he was limping when he came up

here. >> i'm talking about other -- >> you were limping from sex? >> no. like if you go on a bicycle or an elliptical machine or rowing machine. >> i can't imagine how you hurt your leg nlts your downward facing dog though. >> it's your heart because you are straining it and as a result your arteries are strained. >> that's my question. so i originally thought it was about the knees. but if it's about the heart, it should be all vigorous exercise. >> can't be great for your knees though. >> we're talking all vigorous exercise then. >> we always assume you're giving them a good workout. what about just doing too much of something that's strange? remember the great marathoner, one of those guys -- he died at like 52 or something. i don't remember exactly. >> don't exercise too much everybody. >> we like that.

i don't know how much time your kids spend on screens small and large after school. >> screen time. >> it concerns me. now there's a study out that says that teens who bury their faces for a long time have a tough time sleeping. if you are spending more than four hours a day on screens, you tend to sleep as little as five hours a night. you have a harder time staying asleep. and they're saying this is really a bad idea because between the ages of 14 and 17 you should be getting ten hours of sleep. >> and this isn't just the issue of -- does it matter when you go online or use the screen? >> they weren't able to determine a time of day that mattered more. if you have at least four hours a day that you're using -- >> people say not to look at a screen right before you go to bed. i have this new app called flux which changes the coloring of the screen as the sun goes down the screen gets redder so it doesn't feel as -- it's supposed

to help you fall asleep. >> how did you find that? you were reading about it or something? >> i was reading it and downloaded it. >> on what? >> i don't know. one of my crazy -- >> life hacker. do you go on those? >> yeah. squeak out every last minute. >> finding information. when we come back the biggest automakers today. we'll talk to the man who runs the biggest autoretailer. plus house budget committee tom price sounds off on president obama's spending plans. "squawk box" will be right back.

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raising demand for bigger vehicles. but can automakers keep up? a special report from phil lebeau. plus breaking numbers from america's largest auto dealer autonation. plugging oil prices the sliding ruble forcing to prevent collapse. william brouder is going to join us live. vaccinations becoming a flash point. we'll cut through the rhetoric and bring you the facts from a special disease expert. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. dow gained about 200 yesterday. fair value down about 13 up 60

on the futures. the s&p has called up 11. in the nasdaq indicated up almost 18 points this morning. and this is all happening with the backdrop of some firming in the energy patch. >> there it is. we are watching oil prices this morning. take a look at what's going on. now up 11% over the last two days. among the catalyst for the increase in prices pointing to energy giants cutting expenditures and reducing rig counts. large part they say is the reason for all this. bp announced it would slash expenditures by 13% this year down to $20 billion. other headlines to bring you this morning. a potential retail deal in the works. office depot and staples to merge. no word on the proposed details just yet. joe was saying that we shouldn't worry about prices going up in paper because paper is going away. but i don't know if that's totally true yet. also the measles outbreak

turning political as the possible presidential candidates weigh in on whether children should be forced to get vaccinated. here's what rand paul said yesterday on "closing bell." >> i think they're a good thing, but the parent should have some input. the state doesn't own your children. parents own the children. it is an issue of freedom. >> last night hillary clinton jumping into the debate on twitter. she wrote, the science is clear, the earth is rounding with the sky is blue and vaccines work. let's protect all of our kids. #grandmothers know best. >> notice that was retweeted 11,319 times. favorited more than 12,000 times. >> wow. >> whenever i hear the science is clear, it gives me a little edge. that's the only problem. i'll go along with that. i would go along with that. i'm saying there are times when the science is not that. i also see at least the

rationale where you'd say i think it's a slippery slope in terms of the nanny state if you are going to mandate certain things that you must do. and i'd hate to come -- let's think -- can we come up with anything in the past that we thought was really good for you or not harmful. i'm glad they didn't -- because i don't know about that. >> i went back and read something that dahl the author wrote in the 1980s his child died of measles. and he wrote a letter to britain at that point because the u.s. was mandating these vaccinations and britain wasn't. he said for his daughter it wouldn't have made a difference because there were no vaccinations approved at that point. but he went through the numbers on what it meant, something like one in a million children have a reaction to measles

vaccinations. but he went through the numbers of what happens. >> think of polio. >> right. >> there's a case to be made for that. >> you've got to protect society. >> there are people whose immune systems will not allow them to get these vaccinations. so if you don't vaccinate your child, you're putting them at risk. whether it's people who are sick or have had other issues along the way. whether it's children not old enough to get them. you don't get them until you're 12 months old. >> and there's probably -- we could probably come up with a hundred things where it's just not a definitive yes or no answer on how to approach things. >> but for the same reasons you didn't want people with ebola being allowed to go on the subways, i think you have to vaccinate your kids. i think it's the same -- it's a very sort of straight up -- >> right now it's public schools that -- >> public schools don't allow you. although there are some states that will allow you -- the

majority of states that will allow you just for personal choice not to get the vaccinations. >> low gas prices are raising demand for bigger cars. phil lebeau joins us now with more. >> the numbers are going to be coming out within the next couple of hours. we're expecting relatively strong numbers. keep in mind january is the second slowest month of the year in terms of pace of sales. nobody is going to lose a lot of sleep here in terms of whether or not it shows a dramatic up tick or down tick. when you look at the big automakers they're going to have solid numbers for the month of january. here's the estimates from edmons.com. it's within the numbers being reported, we're going to be looking for a couple of things. first of all, consumer confidence. is there any indication at all when you look at the pace of sales or the type of vehicles being sold? did it start to flag at all? so far what i've heard back from

dealers around the country, no. they're seeing the same amount of confidence from people coming in. strong suv and truck sales will continue. that's partially helped by the lower gas prices nap means the mix is going to skew towards bigger vehicles. limited storm impact. we did have the storms that rolled through the northeast last week. might have impacted sales for a day or two in the northeastern region of the u.s. but generally speaking we should not see a huge impact from those storms. you'd have to see storms last over an extended period of time before you see an impact. ford is going to be the stock we watch today as ford ramps up production and sales of the f-150. going to be curious to see what the commentary is in terms of the take rate so far. we talked with mark fields over the past couple of weeks. he says they cannot keep the new f-series pickup trucks on the dealer lot for more than five six, seven days. basically as soon as they get it in, it's already been ordered, it's sold.

so we'll see what ford has to say about whether or not the pace of that demand is remaining red hot for the new f-series. back to you. >> thank you. we should also tell you folks about autonation's january sales. they are just out and the country's largest auto retailer reporting the increase. with the company also posting fourth quarter profits, that was 11 cents better than the street was expecting. revenue coming in at $5 billion. that's up 12% from a yoor ago. joining us is mike jackson, ceo of autonation. these are strong morning. >> becky, how are you today? >> great. >> well the fourth quarter was our best quarter ever. $1.02 earnings per share. up 23%. and that is our 17th quarter in a row of double digit gains and for the full year last year $3.49. 17% our best year ever.

and as far as january's number i agree with everything phil said in his report and for autonation we were up 20%. the only thing additional that i would add is that the comparison is very easy. if you recall january and february last year were very poor for auto sales. absolutely flat in the month of january. a selling rate of only 15.2. and everybody back then was scratching their head as to whether the economy was slowing down. i think gdp for the first quarter last year was done. so the comparison is easy but the message is clear. the auto industry is off and running to break through 17 million unit sales this year. i think you'll see strong reports from all the manufacturers today. >> you know mike around the holidays i think it started with black friday really we started seeing ads that you hadn't seen in previous years. that were people talking about i

fought up a morning to buy this television. and this guy says i got up late and went in and saved $5,000 on this car. i just wonder if those ads were really effective and you think that's part of what helped. >> well the period from black friday through the end of the year is just about one of the strongest selling periods of the entire year for auto sales. and every manufacturer becomes a symbiotic relationship. there with all kinds of programs and incentives to make sure they get their piece of the pie. customers expect it and they're in the market place. but i have to say overall the levels of incentives are very reasonable. to be expected. i don't see anybody doing anything extreme that's not sustainable. and the fundamental drivers for the auto sales remain strong. >> why was the quarter so strong? >> average age sits at 11.4. for us as far as achieving $1.02

per share, you mentioned on revenue of $5 billion, we had double digit increases in every part of our business. new vehicle sales, used vehicle sales, service, parts, finance, insurance. so it was strong across the board for the company. it was just our best performance ever. >> would you tell us a little bit about the type of sales you're seeing? are these lower gas prices really driving people into many more trucks and suvs than cars? >> becky, there's absolutely no question about it. the price of gasoline determines the type of vehicles customers buy. and they determine that on the price of gasoline at the moment they buy. not what they think it's going to be, but what it is when they've decided to buy. and look at this. truck sales have gone from 47% of the mix a year and a half ago to now over 55% of the mix. and the trend absolutely

continues. so while the customers all say they value fuel economy, unless there's an economic underpinning for that and that's driven by the price of gasoline they are going to be more indulgent around the size of the vehicle that they buy and the speed of the vehicle that they buy. that's just human nature. i'm not saying it's right or wrong, but that's the way the marketplace works. >> so what do you do in terms of stocking the vehicles on your car dealerships? it's got to be a situation where they want to buy based on what the gas prices are that day. are you assuming the gas prices will be low for time to come and as a result you're stocking much more of these trucks or are you making sure you have the cars there lined up as well? >> so becky, here's the way to think about it. we're currently at $2 a gallon. i think people really need $3.50 upwards a gallon to value it.

we could see gasolines under $3 a gallon for this entire year. now, i think we're at a low. i think you'll see gradual increases in the price of gasoline because the production costs go up to meet epa standards starting in february. so you're going to get a 25% to 30% -- 25 cent to 30 cent increase that will be passed through over the next several months. and that will stabilize oil around $50 a barrel. probably means we've seen the low point on gasoline prices. >> okay. >> but we have a long way to go before people go back -- shift back under 50% truck mix. >> it's always a pleasure talking to you. congratulations again on quarter. >> thank you becky. great seeing everybody. up next reaction to the president's budget. new house budget committee chairman tom price joins us after the break. then russian officials scrambling to prevent economic

collapse. william browder weighs in. and measles outbreak stirring up vaccination conversations. before we take a break, check this out. as super bowl mvp tom brady won a new truck here's seth meyers' reaction last night. >> brady said the truck handles great after he let some of the air out of the tires.

president obama laying out his $4 trillion budget saying it will help working families. he's got a plan to pay for it all. he says it's now up to congress to get the job done. >> i know there are republicans who disagree with my approach. and i've said this before. if they have other ideas of how we can keep america safe grow our economy, while helping middle class families feel economic security, i welcome their ideas. but their numbers have to add up. >> rarkseaction to the budget representative tom price. he's the chairman of the budget committee. chairman, it's good to have you on this morning. >> good to be with you. >> it's not the first time we've

seen, i guess, a democratic president say i'll raise the fed's spending but i want you to raise social spending at least as much or more. it's just -- this is just what, you know, bird's got to fly, fish got to swim right? >> well look. the president's words would be good news if these policies have worked in the past. this has got us the slowest recovery ever. his budget never balances. it spends more taxes more borrows more. every one of those dollars that is used for taxing and borrowing is a dollar that can't be used to buy a home buy a car, pay your rent pay your mortgage send a kid to school. this is moving in the wrong direction. we think there's a better way to do things. >> well you'll have some say in what finally happens, but obviously we want to try to arrive at some type of budget deal eventually. >> sure. >> where's the common ground? is it -- is there anything with

the repatriation of funds or anything with infrastructure where common ground can be found? >> i think there are two areas. one that you just mentioned. one is tax reform. modernization of our tax system. we believe that modernization and bringing the tax code up to 21st century needs to be done. we need a healthy economy creating jobs. there's a inwithwindow there. and you have to prioritize spending for infrastructure in this country. not just maintenance, but to expand capacity especially in the metropolitan areas in our country. so there may be grounds for opportunity to discuss right there, but the president needs to be more than just a my way or the highway. which tends to be what he's been in the past. >> right. both sides i get.

i take issue when i see people on other networks say the republicans at this point, you know, they're putting up all these things that will never pass. they completely overlook a lot of the proposals put up by the administration, you know we did have an election. elections have consequences. it's a republican house, it's a republican senate. you can't all of a sudden -- it's not business as usual. you can't just put out your wish list of what you want to have happen. it's both sides. >> that's right. that's what helps the american people. >> obviously you both have valid points, but that doesn't help get anything done. >> and that's what they said in november. the american people said we want divided government. we want a branch that's united. we want the executive branch and legislative branch to work together to solve the challenges we have. because they're huge. and we firmly believe if we can get on a path to a balanced budget where the federal government doesn't spend more money than it takes in if we can put in place programs that

will actually save and strengthen and secure medicaid instead of them going broke which is their current trajectory, and if we could put in place pro-growth policies like tax reform, like energy policy. a program that would create jobs and increase american energy and the president seems to oppose that, it doesn't make sense to folks back home. >> it's amazing a couple of years ago the entitlement explosion that's on the horizon was front and center. and we had a commission and talked about grand bargains. this budget it isn't even mentioned how to rein in medicare or social security or anything else. >> social security disability insurance fund goes broke next year 2016. not 2030 not 2033. goes broke next year. and the president doesn't even talk about the kinds of things that we need to be able to say and secure that program for the folks receiving -- appropriately receiving those benefits.

same is true for medicare and social security. those programs are destined to be insolvent in a relatively few number of years. and the president completely ignores it. we have to believe the president thinks the path we're on is what he wants. that's not what the american people want. again, we think there's a much better way to do it. >> so i don't want to -- none of us are interested in making sausage, but how will you -- what will you go back and say and how will this grinding progress be made between, you know congress and the administration? what can we expect? >> well the president's budget is the first step. thank goodness he brought it out on time this year. we will go back to our committee in the house of representatives and work on our budget. we will pass our budget through the house. probably in the last week of march which is the appropriate time for the house. the senate will do the same. then the house and the senate will come together and work out any differences that there are

there. and then we look forward to working with the administration on moving forward with these policies that are so vitally important to get more jobs and opportunity for our country. >> i guess it's a concession to some extent that maybe the world is still dangerous and maybe we should not allow our armed services to sort of atrophy given isis ukraine, and everything else that we thought all that was settled didn't we? or at least we were told it was. >> there's no doubt that the world's a dangerous place. what we challenged the president to do is to define a mission. define what the strategy is. then we'll find the resources to be able to fund that mission. the problem that we have with the white house is they seem to define the budget never define the mission. then try to cram the mission into that budget. we think that's backwards. it's a dangerous world and we need to do our number one job which is to protect and secure the united states of america. >> congressman, thank you. what's your city down there in georgia?

which district? >> the sixth district we live in roswell. all great territory just north of the city of atlanta. >> okay awesome. great. thank you. appreciate it mr. chairman. we'll hopefully see you again at some point. >> thanks, joe. take care. still to come this morning, what is in the dietary supplements you're taking? it could be powdered rice and house plants. we'll have the details after this. 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. oi d my claim in just four days. ahh!

four days? yep. see why speed matters, at aflac.com. the real question that needs to be asked is "what is it that we can do that is impactful?" what the cloud enables is computing to empower cancer researchers. it used to take two weeks to sequence and analyze a genome; u that's what i'd like to do. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

. the new york state attorney general is taking on fraudulent herbal supplements. the attorney general's office accused four major retailers of

containing not what they claimed. often contained powdered rice, asparagus asparagus asparagus, and house plants. but the a.g. sent cease and desist letters. walgreens has already announced it will pull the products in question from its shelves. i'm sure you'll hear similar things from the other retailers soon. coming up when we return the slumping ruble. low oil prices and economic sanctions forcing russia to scramble to get a discovery package. can russia's cash reserves hold out along enough to rebound? more in just a moment.

e financial noise financial noise financial noise financial noise

welcome back to "squawk box," everyone. in our headlines this morning, verizon is reportedly close to deals to sell more than $10 billion in assets including cell phone towers and parts of its

landline phone business. also the justice department will not prosecute news corp. or 20th century fox. and a u.s. district court ruling in wells fargo's favor. groundhog day's a weird tradition. they put the rodents and politicians in uncomfortable and close proximity. this is hard to watch. check out this grouchy groundhog giving the forecast to the mayor of sun prairie, wisconsin. >> he says -- >> whoa! >> wow. >> i mean i'd grab that thing after that and pull a de blasio on him. spike him. adding insult to injury the mayor botched the forecast.

the handlers say he saw his shadow predicting six more weeks of winter and the city issued a statement saying that only the mayor can translate the groundhog's prediction any way he wants. >> has there been a groundhog in 40 years that hasn't seen his shadow? when you set up all the lights and cameras, it doesn't matter what's going on. is it where you mess with the experiment by throwing yourself into it. >> look at that. look at that. it's a little mike tyson almost. right to the ear. >> it's a tetanus shot after that. don't you think? number one, don't hold a wild animal up right next to your ear or any other part that you want to hold onto. >> always taking it there. okay. >> no. fingers, nose eye.

why what are you thinking? >> i was thinking johnny knox when you mentioned that. >> we got a guest who watched the shadows behind him all the time. russia facing its worst -- >> stupid. terrible. >> worst crisis since 1998 with the ruble hovering now near historic lows. the economy in tatters as oil prices and manufacturing slump to the lowest level in five and a half years. joining us with more is william browder. he is the author of a new book called "red notice: a true story of one man's fight for justice." there it is on the screen. congratulations on the book. it's your story of everything that's happened to you over the past eight years. getting kicked out of russia then your lawyer going to prison and then dying in prison. it should be a movie, is what it should be, in addition to the book. >> it will be a movie.

we're just promoting the book now. but the movie is in the works. no question about that. >> let me ask you about the news first and then we'll circle back to the book. when you look at what's going on in russia and i know you have your own views about mr. putin and what he's done to you, but do you see any hope for this country in the next 24 months in terms of what happens to the ruble? >> let's go through what's going to happen. the first thing is they're going to impose security controls and capital controls. you can't have the ruble continuing to devalue, people continuing to take flight capital out of the country, and the reserves continuing to get drawn down. so every day that they say there's not going to be capital controls is one day closer to them imposing capital controls. that's the first step. second thing that happens is when they impose capital controls what does any smart russian do? figure out a way around the controls and take more money out. so there's going to be no money in the country. what happens then?

you're vladimir putin, there's no money in the country. you're not used to being in this situation. and what you're going to do is figure out ways of nationalizing more companies. and so when i look at russia right now, i say to myself this is -- some people -- some investors say you made your money in russia when it was cheap. i'm saying now it's cheap for a very good reason. >> but you don't look at this and say maybe there's an opportunity here? >> no. >> you wouldn't for your own personal reasons but -- >> no no. putting aside any animosity i have towards putin or russia it's a value track right now. low price earnings ratio only helps you if you actually get those earnings in the end. none of that money is going to come to you. you're either going to lose it from capital controls appropriation, or from fraud. which is how many people are. >> how much of this is a bet on what happens to oil? >> it's about half of a bet on oil and half a bet on ukraine. >> and what is your bet on oil?

>> nobody knows what's going to happen to the price of oil. there were a lot of people on a year ago not telling you what was going to happen. so i don't know what's going to happen to oil, but i do know the likelihood is that oil prices are not going to go back to $100 because that's a large rise. if they don't go back to $100 russia's in bad shape. >> a lot of people said while we don't want a super strong russia we also don't want a weakening russia. that has officials incredibly worried. if you back somebody into the corner, they're more likely to try drastic and harsh other situations to get out of it. what would you say to that argument? >> nobody backed putin into a corner to invade ukraine. he just -- he saw his ukrainian counterpart get run out of the country and said we need a massive distraction and that's what ukraine is about.

ukraine is a brotherly country that was doing nothing and all of a sudden they get invaded by russia. this is not -- you know no one backed him into a corner. >> but from a larger perspective, the united states needs russia when it comes to syria when it comes to figuring out other issues in the middle east. where do we want russia? and is your problem with putin or russia in general? >> i'm not sure if it would disappear right away but there's 140 million good russians and a million bad ones occupying the country. as far as syria and the united nations go i don't think that putin has been particularly helpful in any of these areas. he's basically using it as an opportunity to hijack the world. >> talking about hijacking the world, where do you think the eurozone is right now? what do you think of putin's role in greece? >> putin would love -- the eurozone is an extremely useful collection of countries.

there hasn't been a war in europe in 50 years because of the eu. there's a strong and historic reason to keep it together. i think there's a lot of people who have a very big vested interest in that. putin would love to pick everybody off against one another. so he's out there -- he was trying to do this with hungary. he's trying to do this with greece. where he was the first visit to the new prime minister was a russian ambassador with a message from putin. thankfully at least at this stage of the game greece has got enough sense not to go along with that plan. but putin is trying to mess up the eu. he'd like to mess up nato. he'd like to figure out a way to make the nato mutual protection treaty not work. he's playing this chip wherever he can. i don't think there's anything we can do to make him worse. he's as bad as we're going to get. >> given all the bad news you're providing, as an investor where are you putting money right now?

is there an opportunity out there you see? >> we've known each other for a long time and aye made all my money in emerging markets. and i have no money in emerging markets right now. >> this is the emerging market right now for you. >> so many actions taken around the globe and central banks? >> so you have currency problems, political problems economic problems in a lot of emerging markets. i think people were way too dismissive of the types of risks emerging markets have. you have a rule of law, stable political system and some economic growth. so i think that you're going to see this being the safe haven of the world. even with equity being expensive, you're going to see them being better here. >> so the book is being called "red notice," is it being published in russia? >> that's a good question. anyone we presented it to has grabbed onto it. but there's not a publisher print or online in russia that

will go near it. respectively been banned in russia. >> can you get it over kindle in russia if you have access to the internet? >> if you have access to the internet and have a u.s. amazon account, you could download it because we have translated it and published it in russian for people who have access to systems outside of russia. >> and your lawyers nervous about anything in there? >> no. the russians will come after me. i spend a good part of my life deflecting attacks from russia. most recently they came after me with interpol with the third request to put me on the system. >> they're not after the lawyers. >> so the russians, you know they'd like to see me go back to -- go to prison in russia. they sentenced me to nine years in prison in russia. >> that's scary. >> but you are never setting foot in russia again, i take it?

>> i'm not while putin is in power. >> you're an expert on putin. do you think that we should spell it put'n just so people do not say pu-tin? if we do it put'n, do you think people will say it right? say it. give it a shot. >> who you talking to? >> what if he came to manhattan? >> the book is called "red notice." thanks for being here this morning. >> thank you. when we come back this morning, top health officials testifying on capitol hill today about this year's flu season. and also address controversy over the vaccines and measles outbreak. in the meantime let's look at

equity futures. right now the dow futures are indicated up by about 55 points. s&p futures up by 8.5 and the nasdaq up by 14.5. stick around. "squawk box" will be right back.

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there are more than a hundred confirmed cases of the measles in 14 states across america. last year was the worst year for the measles in 14 years with almost 650 cases reported in the united states. raises the question of what steps we should be taking to stop things from getting worse. joining us right now is dr. gayle schutz. she is from mt. sinai. she's also assistant professor of pediatric and infectious diseases at the school of medicine. thank you for joining us this morning. we want to talk about this today because suddenly there is this huge politicalization of whether or not kids should be getting vaccinations. yesterday chris christie and rand paul said they favor parent choice. what do you think? >> i think the most important thing to remember is it really is not just a personal choice but a public health issue. if someone decides not to

vaccinate their child, not only are they potentially putting their child's health at risk but they're also putting other people at risk who don't have the benefit of getting the vaccine like people with a compromised immune system or babies who aren't old enough pregnant women. >> the measles has some severe side effects that go along with it. it can cause death in certain cases. it can also cause brain swelling that can lead to issues along the line blindness showing up in situations like that. we thought we had gotten rid of this. but last month over a hundred cases. there are pockets. why is it happening? because people are choosing not to get vaccinations? >> so that's correct what you said for the most part in this country we had eliminated it. but it's still a worldwide problem. most of the cases that come in are from foreign travelers or people in this country who go to other countries and bring it back in. there are pockets of populations in our country where people are choosing not to vaccinate, so that helps to spread the infection. >> i think even rand paul or

chris christie would say everybody should get vaccinated. i think they would say that. i don't know that they would -- >> for everything? >> i think they would say that. i think the point they were making is it's just a -- you know it's a slippery slope to make it like a law. right? would you agree with that? >> i can't speak to the public policy for it. again, i think for the general health of the population, i think it's really -- >> you remember the original polio vaccine. >> yes. >> you remember it was contaminated with the virus 40. luckily it didn't hurt humans. so, i mean the science is never completely set. i think about for awhile we didn't know what hepatitis c was. we didn't know it existed. now it's hepatitis c. we didn't know it was in blood transfusions. for years it was these are safe these are safe. you can say it until you're blue

in the face but when parents are thinking about their children -- i'm not saying autism has anything to do with it either. but when the government mandates something, it's a slippery slope. which vaccines do you use? the non-life threatening ones? just ebola vaccines mandatory? how do you do it? it's a tough one, isn't it? >> it is. it is a tough one, i agree. >> everybody should get vaccinated, i think they would say that. >> a situation like ebola, we talked about how hard that was to contract ebola. measles is highly contagious. >> exactly. it's one of the most contagious infectious diseases. and i think you're right. you can never say never. but the overwhelming scientific evidence at this point shows that these vaccines are safe. and even though occasionally you can see some side effects, they're far safer than the potential of contracting these illnesses and the possible

problems from being infected. >> i think you made the point earlier, doctor in the notes that there's something called herd mentality where it's okay for you not to vaccinate your kids as long as the majority of people are doing it. 90% people are vaccinating. if that's the case you're safe. where are we now in terms of the population not vaccinating? and what's the level that we're actually seeing to get these pockets? >> so the general population again is still probably 90% or higher. which is great. it's just that in certain communities, it's falling below that threshold. >> and the trend is going the wrong direction in your mind. or are we just talking about it more? what's happening here? >> i sense a little bit of both. we're definitely talking about it more now that we see measles here. but again in certain populations, in certain communities. the trend is going -- so the one that comes to mind now is in certain counties in california. in part though that's because this current outbreak started at

disneyland. >> hpv is not mandatory yet, is it? >> it's not that it's mandatory, but it's on the recommended schedule. >> and then you get into the crazy, you know religious ramifications about whether -- i don't know what those are. but why would you not get a cancer vaccine for people if you know that that virus does cause cancer in certain cases? why wouldn't you get it? yet, it's still not -- there's not a law that says every child has to get hpv either. right? >> so, i agree with you. i think part of our job as medical professionals is to help educate people. i think there's a lot of bad information out there. and i think it can be scary. but at the end of the day most people want what's best for their kids. i don't think most people are saying i want to hurt my child and therefore i'm not going to vaccinate them. but maybe they don't understand why they work and how they're important. >> rand paul said i've seen cases of walking, talking,

normal children that ended up with disorders after vaccines. is he right? >> i think that that is a generalization. i can't speak for what his intention was with that statement, but again, the overwhelming scientific evidence shows that these vaccines are safe and they're effective. and i think that for the health of children and our community, they're important. >> when you combine them all, there are some that have three or four together. and we were debating early on -- >> five six shots at the same time. >> is there any way that the immune system could be overwhelmed? that we could do it wrong? that we could put too many together? is that possible? >> so again, never say never, but that is a common concern of parents so i'm glad you brought it up. that's not how the vaccines work. it's not a matter of your immune system is going to become overwhelmed by these vaccines. and one thing that's nice --

>> side effects, but probably nothing that serious. >> one thing that's nice about the combinations is there's fewer shots. understandably some parents or a child might not want to get five different injections at a time. >> doctor thank you very much for joining us today. when we return big movers this morning. your list of stocks to watch is coming up after the break. then many the next hour, new challenges to uber including high profile competition. you know the name. you use it for search. stick around. we're back in a moment.

u.p.s. just out with earnings of $1.25 a share. in line with expectations. revenue came in line slightly above what wall street was expecting. more on the u.p.s. results with an analyst in the next hour. and then the company's cfo is going to join "squawk on the street" at 10:00 a.m. eastern. among other stocks we're watching this morning, wendy's earnings matching estimates, but revenue is a little bit shy. the fast food chain says it will take advantage of low interest rates to recapitalize its balance sheet. coming up the price of crude climbing again this morning. have we seen the bottom now? and if so how long will it take before gas prices reverse and start to actually go back up?

john hofmeister tackles those questions next. as we head to break, take a look at u.s. equity futures a a strong session yesterday. more of the same at least on the open expected this morning.

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playing the oil patch. two straight days of gains, but will an inventory glut put a damper on the rally? can u.p.s. deliver for investors? and how safe is your information when catching a ride with uber? we're going to discuss the future of the company and talk about a new possible competitor with a very familiar name as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box." this is cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. we are less than 90 minutes away from the opening bell. if you've been watching the boards this morning, the dow futures are up about 60 points

above fair value right now. nasdaq up by 8.5 and nasdaq up by 14. in europe we have seen green arrows there as the greeks seem to be stepping back from some hard lines. at this point gains better than 1% for france, germany, london. greece, the stock market up by more than 10%. let's tell you what's making headlines at this hour. bp slashing expenditures by $20 billion. in an interview earlier this morning the bp ceo said it may stick for some time. also the nation's automakers will be reporting sales. we'll see if lower gasoline prices are driving the spending on trucks and suvs. and alibaba is trying to break into the u.s. the chinese e-commerce giant is teaming up with lending club to offer financing to u.s. that want to buy from chinese

suppliers. >> bob dudley. >> bob dudley ceo of bp. >> certainly is. a few stocks to watch this morning. u.p.s. posted earnings in line with lowered expectations. we'll talk to an analyst in about 15 minutes. etna's earnings matches. that number still below street consensus. aetna also being impacted by rising medical costs. "the wall street journal" reports that staples and office depot are in advanced talks to merge. no word yet on the proposed terms. but the activist called for a merge last month. and rent-a-center taking a hit. late yesterday was down about 14%. as you can see the quarterly results fell short of estimates. also weak guidance was issued for the full year. earlier this morning as we were just talking about, bp ceo bob dudley joined cnbc's worldwide exchange to talk about

the company's results and the overall oil market. >> i think it's going to just take time. it could be a long time. there is excess supply. u.s. production is actually still growing. we see about the rate and what it's growing. of course there's great growth in china. so we have stock levels filling up all over the world. tanks are filling up it won't be long before i see i think people putting them in ships. and i think that takes a long time to work its way off. >> john hofmeister joins us now. he's former president of shale oil usa and the founder and ceo of citizens for affordable energy. and i don't think any of us really know everything that's happening in terms of what is moving crude at this point. obviously a lot happening with opec's decisions and saudi arabia's decisions. also things happening that we don't totally understand in terms of global demand. none of us are experts there. but we did see a bit of a move

back up. i'm wondering when the big money, the big hedge funds and guys maybe not making money anywhere else they've got a lot of clout. i'm wondering when they decide it's time to buy and whether that could give us 10%, 20% upside. >> well i think some are already starting to buy because the price is so low. and why would they miss this opportunity at these prices? i think the biggest unknown is the demand side and what's the growth going to be this year. but there are some things that we know for sure. for sure we know that oil production will naturally decline by 4 million to 5 million barrels this year. without new production coming online. now, the new production coming online currently exceeds the natural decline rate. that's why we have the surplus. and what we don't know then is how long will that surplus continue? i projected in my own calculations that the surplus will probably continue at least

through mid-year. but by mid-year, that could be july, could be august. i'm using a prod definition of mid-year. but when that equilibrium is reached, then with the decline rate offsetting production growth, now we're going to find ourselves looking at a very tight equilibrium which will lead to short by the end of the year. and so what i predict is that we'll see low prices between now and, say, june/july. then the hedge funds, you're right. they'll start buying lots of oil, set it in tankers. so they can make a lot of money as we move into the latter part of this year and the first part of next year with their inventories. >> before we continue i just want to break in here with a bit of breaking nuss. we talked about it earlier, but it's just crossing the wires now. mcgraw hill financial and s&p ratings have reached that settlement with the doj.

in 19 states as well as the district of columbia and with calpers as well. here's what's going on. the company is going to pay $687.5 million to the doj. it will also pay another $687.5 million to the state and to the different states and the district of columbia. then it's going to pay calpers $125 million. we're talking about $1.5 billion all in. so that's what the settlement will be for those ratings. of course this relates back to the financial crisis of 2008 actually really before them. >> the reserve at this point, you think? >> most of it was reserve. >> and that's after tax? >> that's a good question. i'm assuming so. >> okay. let's see, john what was the last thing you said? okay. even on technical terms, we see 50% retracement. i'm trying to figure out. a hundred down to 45. it's at 55. so add 45 plus 27.

so that's where you'd figure $70 probably is not -- would not be surprising to see it go back there at least. >> certainly. and i suggest by probably later this year. the one thing that is true also is that the industry particularly in north america has to use a british expression the bit in the teeth on the cost. we're into the ruthless cost-cutting mode now. that has led to an enormous number of rigs being shut down. faster than predicted. and now a lot of folks here in houston are raising their estimate on how many additional rigs will be shut down over the next couple of months. so when you've got that kind of production disruption that is affecting potential surpluses down the road they're just not going to materialize. and nobody will know the date by which all this comes to equilibrium equilibrium, but i don't think it's that far off. i respect bob dudley

tremendously, but i don't see a long time for this to reach an equilibrium point. >> just watching it come down from $95 there's a lot of people obviously in the business that wanted it to stay at $95. i mean whole countries can't pay their bills now because it dropped. so if there was a way to keep it there, there were interested parties that would have done it. sooner or later supply and demand just outstrip everything es. then i think about hedge funds. i don't think they can control it, but they can certainly jump on when there's a trend going one way or the other and make it go further. so i think you're right. we're going to have to see the actual supply/demand dynamics change. then we'll see some of these guys move in and exacerbate the move one way or the other. >> remember joe, the capital cuts don't just affect 2015. they're going to affect '16 and

'17 as well. when people put down rigs and so forth, there's no sudden resurgence that's going to come back on. so we're going to see, i think, a slower production growth in '16, '17, '18. and if the demand growth is predicted, then we'll see the return of $100-plus oil. >> yeah i don't know. i don't know. that'll be -- that's the questions that's out there that even, you know certain saudi guys in the know said we won't see $100 again. but nobody knows, obviously. they wish it was still $100 i'm sure. all right. john hofmeister it will be something we can watch other than just stocks and bonds. so oil prices will be interesting for the near future no doubt. thank you. >> thank you. oil prices as we continue this conversation rising more than 11% in the last two days and adding more this morning. oil service companies going along for the ride if you want to check it out now. dominic chu joins us now with

more on the move in the oil stocks. >> good morning, becky. what they can expect right now is the oil volatility trade will continue. that's leading to volatile moves in oil stocks. if you look at year to date winners, energy is still a fairly big drag on the overall performance of the s&p 500, but there are some names where investors are really starting to nibble at with regard to at least calling maybe for a short-term bottom in stocks. two refining companies here up about 10%, 11%. what's interesting is valero it's riding an 11-day winning streak. and tesoro is up 12 out of the last 13. there's short-term momentum going for these refining names. and the single best performing s&p energy stock this year to date is newfield exploration. up 15%. now, there are still really big drags here as far as the sktector

goes. we're still in earnings season right now. but we already know from what's reported that the blended earnings growth rate for this past quarter for the energy sector is a 19% drag. 19% drop in the same time last year. and sales growth is expected to be a 14% drop from last year. that's as of yesterday. so it's going to become clear whether or not that energy trade is going to be as big of a drag as people think. but for right now, some investors are trying to pick up some bargains at these levels. >> we appreciate it. see you soon. coming up next we'll continue a bit of that conversation because u.p.s. is out. reaction we'll get from a top analyst on the street. and then at 8:30 the ceo of paychex. we're going to talk all things uber this morning. then we've got jim cramer from the new york stock exchange.

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welcome back to "squawk box," everyone. sales out from chrysler. january u.s. sales were up an even 14%. that was slightly above the

estimates for a 13.2% increase. a sneak peek this morning of frozen fever. it's a seven-minute short from the folks who brought us the hit in 2013. the latest storyline will be shown in theaters right before disney's live action "cinderella" which will be out in march. a little taste is here. elsa throwing anna a birthday party. but then comes down with a cold. and that's when surprising things happen. so there you have it. a lot of people may go out just to see the short, let alone the live action cinderella. we will see. also u.p.s. rolling out quarterly results just minutes ago. the giant earning $1.25 a share. that was in line with what were lowered expectations. senior transportation analyst joining us now. >> good morning. >> let's walk through the numbers.

they are in line with expectations, but expectations had been higher and now they're lower. >> there were no surprises in this in they had already announced a couple weeks ago they were not going to make the number. i was at the bottom end of the range a couple weeks ago and was rewarded for that lack of faith. we were all looking for $1.45-ish and they indeed reported $1.25. you know you'll remember that in the holiday of 2013 they had a brownout in service. and u.p.s. was very, very clear that they were going to spend whatever it took to make sure that didn't get repeated in the holiday of 2013. and that's what happened. they spent a bunch and didn't make very much. >> and therefore, was that a mistake? when you look at what they should do next holiday season is there a way to approach it differently? >> well i think strategically they had to spend what it took to protect the integrity of the brand. i think we all understand that

and in their defense, that was the right thing to do strategically. but tactically it hurt them. i think we'll see them be more judicious in their spending in 2015. so will they spend as little as they did in the holiday of '13? no. >> but how do you raise the margin and make sure all the packages get where they're supposed to be? >> that's the tough part. you know part of u.p.s.' challenge is they hired additional temp rare workers. that's a workforce that doesn't have the flexibility that fed exdoes. >> so you think the lower oil prices would be helpful. but you say the unions are a problem. you say the euro-centric business is a problem. i want to know what that means. and you say fedex is highly entrepreneurial. >> it is. let's face it. u.p.s. is a great company.

it was founded in 1907 but none of the original entrepreneurs are still there. fred smith who started fedex still shows up at the offices in memphis every morning. it's still a very entrepreneurial company and that extends all the way down to the operators, the ground drivers are owner operators. if they get an extra package, they get an extra stop, that's extra money in their pocket. they're driven in a way an hourly employee can't be. unfortunately for u.p.s. fortunate for fedex. if you look at what's happened in e-commerce since '98, '99, you've seen a surge in parcel volume. flat with where it was in 1998 and '99. all of the additional volume that's been generated has essentially landed in fedex's lap. you yourself are entrepreneurial and you identify with a company that is also entrepreneurial. >> okay. and then when you say euro-centric business what's

the problem there? >> well it's not a problem as much as it is just an explanation of what's going on. why did fedex not report currency issues? if i look at the world, there are three major theaters for air freight parcel. north america, u.s. and canada being europe and being asia. there are two dominant players in those. obviously it's fedex and u.p.s. in asia it's fedex and dhl. in europe it's dhl and u.p.s. so when you have a crash in the value of the euro relative to the dollar when you translate that, those profits, those rates back onto an immediate income statement, it has a negative head wind from a currency prpt i. >> we appreciate your perspective this morning. thank you for joining us. the company's cfo is going to join "squawk on the street" later this morning to talk about these numbers and more. coming up it's not quite

ketchup. definitely not mustard. so just what's in that special sauce that makes a big mac taste so good? we'll have a chance to win a very special bottle of that stuff. and the proceeds go to a good cause. details after the break. then it's the ceo of paychex. the company set to release reads on how small businesses feel about the economy. "squawk box" is back right after this break.

♪ we've all had it. we know how good it is and we've all said i wish i had a bottle of this at home. none of that is true. but we're talking mcdonald's big mac special sauce. i wonder what it is but i know it's probably got -- >> remember the simpsons where they say take the mayonnaise out in the sun. >> now you have a chance. mcdonald's australia will sell the questionably orange sauce to be purchased. and it's got a good cause. part of a charity event. mcdonald's australia has listed the first bottle on ebay for auction. proceeds will go to the ronald mcdonald house charities australia. and there are seven days left to bid.

currently someone is willing to pay almost $18,000 for the first bottle of the sauce that goes on the -- they've got a new ronald. >> i'd love to see money go to that. i think it's a mix of ketchup and mayonnaise. >> it's a russian dressing. >> that's what it tastes like to me. i think he knows what the secret sauce is. >> isn't that how you make russian? mayo and ketchup. >> it tastes like that with some pickles in it. >> doesn't seem that complicated, no. not like coke. >> secret formula. >> or kfc original recipe. no one will ever replicate that ever, i don't think. when we come back this morning, the ceo of paychex on what his small business customers are saying about the state of economy. and later, uber constantly

making headlines. from new rules to ride sharing to passenger safety to autonomous vehicles picking you up. we'll talk about the future of that company in just a bit. meantime, though as we head to a break, look at the u.s. equity futures. stick looking at the dow up 66 points. s&p up close to 10 point. nasdaq up close to 15.

♪ welcome back to "squawk box." here is what's in our headlines this morning. standard & poor's has struck over ratings. it will total $1.5 billion to the justice department. 19 states and california pension fund kal bers. chrysler reporting slightly above estimates for january. and raid joedioshack is being

delisted. and the idea of bankruptcy not far away is also circulated. new photographs of fidel castro just posted in cuban media. said to be taken on january 23rd. castro stepped down from power back in 2008. he has not been seen in public in about a year. his picture has not appeared in cuban media since august leading to speculation about his health. >> these pictures they try to make it look like it's a casual setting. but they're setting these up as proof of life. they've got him watching television to see what's on at that point. looking at some newspapers. >> they do? yeah, i need him to hold up a "new york post." if it had the current headline then it's for real. he's not looking that great. but he seems to be vertical. >> there's the newspaper. >> yeah. all right. we have been trying to

wonder about january's stock market volatility. was it a glitch or a trend to endure through 2015? let's get a check on investor sentiment with senior portfolio manager at the private client we serve of u.s. bank wealth management. eric is part of a team that oversees $126 billion in assets. thanks for being here today. >> thank you for having me. >> there have been a lot of weird moves over the last many months. we've seen oil doing things we never anticipated. bond yields doing things we never expected. and that's played out in the stock market as well. are we near the end of that chaos or is that the beginning? >> there's no doubt about it. the volatility has been extreme. if you look over the last 22 trading sessions 20 of them had had seen variants of 1% or more. while that pace may subside a bit, we still think volatility is in the cards through the rest of the year. >> what does that mean for the average investor? should you keep putting away

like you have on a regular basis? should you be more picky about your spots and timing? >> you know if you have a long-term investment horizon, adversity could create opportunity. so we are encouraged about that. people should revisit their asset allocation. beginning of the year is always a nice time to do that. make sure you're not concentrate concentrated on what was necessarily the last year's winners. >> where would you tell people the focus is? >> u.s. stocks? overseas stocks? what kind of areas jump out at you? >> we continue to advocate broad diversification. but still would be for more domestic orientation. that doesn't mean we're excluding international. we certainly are interested in international, but a little bit down from where we would have been a year or two years ago. and as far as fixed income is concerned, there's still opportunities out there. i know it's difficult to suggest when you see the 10-year treasury around 1.7%. >> right. >> but we do think it's a very

attractive opportunity especially for taxable investors in the pace space. >> not even not just corporates. you're looking at municipals as well. >> correct. absolutely. >> in terms of why you like u.s. stocks better, what's happened to make you like international less and u.s. more? is it just the economy? >> it's the economy, certainly talks about the dispersion of economic reality being incrementally stronger here in the u.s. and still seeing some deterioration globally. that's one factor. being more domestic in the orientation. so we don't have that same repatriation issue with the strong dollar has us again focusing on incrementally more on those domestic-oriented companies. >> are you in the camp that thinks we have bottomed out on oil prices? we've seen the 11% move over the last two days. things seem to be heading back higher, but how much faith would you put in that move? >> still going to be candid with you. no doubt the volatility has been

extreme. when you've had more than a 50% decline. seeing some bounce is to be anticipated. what still has us somewhat skeptical, though is unless there's a significant increase in demand in the very near term supply still hasn't been addressed. kal capital spending has come down. we're starting to see more emphasis on taking labor costs out of the equation. but supply and inventories are still at very robust levels. and also looking at you know these companies now even with exxon's announcement yesterday. there's a real focus on living within their cash flow. so there isn't a sense they're out of the woods just yet. they may see some bottoming for long-term investors it may present compelling opportunity. we're still just a little suspicious yet and still underweight. >> all right. eric, thank you. >> thank you. paychex just out with its

monthly small business jobs index. in january saw the strongest one-month gain since the peak in april. indiana served as the top ranked state for business. let's get to the ceo of paychex. and this -- you couldn't tell from the .09% sounds like a small number, but that is a good one-month gain. the strongest we've seen in a awhile. >> yes, it is. this is the first time since april 2014 wife've seen a positive turnaround. you look at those numbers and continue to see the central states having the strongest small employment growth. we think it's a nice start to 2015. >> and portends well i guess for our number on friday. what -- is this a confidence issue? what would have caused this? because we've seen the nfib. they're still -- they haven't really responded to the improving economy from what we hear from dunkelburg most of the

time. >> you see the consumer confidence is at an all-time high in about seven years. so i think the consumer confidence and the small business nfib index being positive helped. also housing starts are up really for the first time in quite a few years. and i think all that's bringing construction jobs back and the energy is still helping. might have been a drop in houston, but the central states around energy are still positive job growth. >> i don't think of indiana as a necessarily as a big energy producer. why is indiana doing so well? >> well that's hard to say right now. that's a one-month thing where we've seen most of the states it's washington state, texas with energy. still been consistently strong. indiana popped up for the first time. we're really not sure what's driving that. although you do see some entertainment jobs and other things around housing bumping that may be something to do with

indiana right now. could be a one-month thing. >> any positive -- i mean you mentioned the oil thing. that could reverse a little bit in some of the states that are going to be negatively impacted by the drop in oil. but when does everyone start doing better with cheaper gas prices? >> you know what we have seen is of the 20 states we analyzed 15 of those showed small business growth. some of the gasoline, reduction in the price, more spending consumer confidence is showing up in a number of states. still not seeing it on the east coast too much. still below a hundred. so small business growth in the east coast for the most part still below where it was in 2004. >> so we've had six year of relatively tepid economic activity. does this indicate to you that we really have turned the corner for 2015? >> well i hope so. we did reach a peak in 2014.

when we saw job growth at the highest rate. but it's still higher than our index. the index is over you know over where it was in 2004. so i think job growth for small businesses has still been pretty steady and we're hoping that this shows that 2015 will be a great year. >> okay marty. thank you. we appreciate it. marty mucci from paychex. thanks. coming up next lots of questions surrounding ride share company uber including how safe is your personal and financial information from drivers? plus rumors of a possible new competitor. that and a lot more after the break. take a look at futures as we get to the break. dow looks like it would open up 42 points higher. nasdaq looking up 9.5 points. s&p up 6.5 points. ♪ there's confidence. then there's trusting your vehicle maintenance

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welcome back everybody. united nations agency is expected to push today for rapid adoption of new aircraft tracking proposals. this comes just short of a year since the disappearance of a malaysia airlines flight. new rules would call for a combo of regular tracking in normal flight and accelerated signals whenever an aircraft getting into trouble. let's talk about uber now. privacy policies have come under constant scrutiny. the company has been standing by its practices until recently.

valued around $40 billion, they're expected to strengthen their practices and acknowledging that quote, we haven't always gotten things right. joining us to talk all things uber is the managing editor of recode. we also have a new competitor maybe in google. >> google, right? >> yeah i want to go there first. is that real? >> well let's -- we haven't had any reporting to that effect. i think it's one of the -- i think it was "business week" reporting that out there. i think it's entirely possible given the fact that what is uber really? it's a software business. they don't own cars. they don't employ drivers. they contract them out. they said this themselves. we create software connect drivers with passengers. that's it. google is good at software too so why shouldn't they try to do it? >> from what we have read though, about what google is trying to do, they're trying to take their robotically controlled cars self-driving

cars and hook them up to an uber-like service so there is no driver. >> no driver. there's a different liability there. they've been first on that for awhile. >> but how -- they are so first on that. if we ever get to self-driving cars, does google just own that business? uber is worth $48 billion today, does that become zero tomorrow? >> well i think that's -- i think the competition whether it's google or whatever other company that comes down yeah. i think it's problematic for them. >> and we see that uber is now apparently trying to invest in some kids at carnegie to do self-driving. how far behind would they be? is google a decade ahead of everybody else? >> they're definitely years ahead of everyone else. i don't know if it's a full decade necessarily. i think part of what allowed google to do it quickly is they use a lot of off the shelf parts in the first place.

it's not like detroit where they're building from the ground up. it's the software. it's the engineering really that allows them to get ahead. any other competitor can catch up within a few years. >> does $40 billion make sense? does $20 billion make sense? does any of this make sense anymore? >> add what it is 25 times profit before tax, that's like -- uber oos got to bring in $1.5 to hit that valuation. they're not going to hit that market until the end of next year at the earliest. that's still a really really lofty valuation. >> also no competitor really ever shows up. that they are really the only game in town. now what we're talking about is a real potential competitor in google google. >> google has name brand value. and they spend a lot on marketing. >> there's about five other people trying to do what uber's doing now. and you don't use them because they don't have enough cars or

won't show up on time. >> or maybe you're worried about the price. google could undercut uber. they could lose money for a little while. >> this is like the auto industry. just because you're there first doesn't mean you're going to last throughout. >> exactly. >> which is great for consumers. >> part of what allowed uber to grow so quickly is because they're not hoarding any inventory? they're not doing payroll taxes. right? they're just saying hey, sign up. then you can start driving with people. >> then segue to the privacy issue for a second. it does feel like they sort of shifted their stance if you will, around not just privacy but their sort of public relations efforts. meaning we've seen travis sort of get out there and say he wants to become friendly in europe where before it was an all-out war. >> there's a lot more regulation in europe to begin with for all kinds of services. we sometimes clamber about it here.

but in europe it's more stringent. there's more rules and trade going on over there. as much as uber and other silicon valleys are up to disrupt industries, it's that much harder when you're looking at local laws local regulations. >> is this a kinder gentler -- >> i think it's kinder gentler. they'll do more politicking. the new head of communications over there. but i also think that's not the only aspect as well. i think they have to actually in practice make that clear to people that they're being transparent. they're not going to look at your data for the wrong reasons. someone that isn't fully transparent yet. >> that's where we went. >> david? >> yeah. whoa, i'm familiar with his work. >> a lot of people are. >> i don't know if i believe a word from uber.

so they can have -- you can call up and get -- can a total beater show up or they'll make sure that -- >> no it has to be a relatively new car. it has to be within the last three years. >> relatively new and -- >> no, no. it's between certain -- i've never gotten in a real -- >> can it be a 10-year-old camry? >> no. it can't be more than a few years old. >> can it smell? >> in certain places it can. >> also you can rate the driver too. every time you use the service, you get prompted to rate the service. >> you don't get to choose which driver comes up. >> you could end up with a two-star driver. most of the time i've done it it's great. more of the issue is i'll call for uber and it doesn't come or they cancel the call. >> and the other big shift is sort of the change in how they're approaching surge pricing. with the snowstorm they limited the surging. >> they capped it. you can't -- you know, you're not going to get gouged on a

snow day necessarily. i think, you know we talked about this before. surge pricing when that happens it's a sign it's not working. i think even for uber that's not what they want either. >> i think it's tough to -- how do you define what price gouging is versus surge pricing? supply and demand? it's a very difficult line to draw. >> that's right. but it deters a lot of potential users. i don't know if it will cost more than i want to pay, so people are afraid of it and don't want to jump into it. i think once you start doing it on balance it ends up being a fair deal. but it's still, you know they're still marketing the service. you have to get people to understand it use it download it on their phones and play with it. >> i am a uber user and will accept the surge pricing. thank you. >> just some crappy looking white car can pull up. >> no, it really can't. no. >> well it can't be a teenager. they have to be a licensed driver to begin with.

>> teenagers can be licensed drivers. >> there is a -- >> there's a vetting process. i've never had a bad process. >> i'm not going to airbnb or any of this. >> really? >> no. >> we should do an uber. >> yes. >> tomorrow. we have a meeting tomorrow. >> to an airbnb place and hang out. i need cable and a flat screen. >> you need cable? >> and a flat screen. that's it. >> a lot of airbnbs will have those. >> you know about that too? >> yeah. we test them all out, right. >> all right. thank you. it's thousand island. >> it's thousand island is the mayonnaise and ketchup mixed together. something else in there too, right? you said that though. >> i can't remember minute to minute anymore. up next we're going to head

downtown. i've heard of this guy, jim cramer standing by at the new york stock exchange. his take on u.p.s. earnings. next next. "squawk box" will be right back. what can your fidelity greenline do for you? just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own. helping you find new ways to plan for retirement. and save on taxes where you can. so you can invest in the life that you want today.

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welcome back, everybody. paying close attention to the squags in greece and so is the market. angela merkel saying that her government is waiting to hear the position of the new greek government decline doing comment on reports of proposals. she has long said that berlin will agree to financial debtor countries such as greece only if they commit to tough, economic overhauls. the greek new president has been pocking back some of what he's been saying and that's why you see the strength in the euro at

1.1438 to the dollar. >> stocks on the move to check out. advent software getting a boost, being bought for $44.25. wendy's earnings matching estimates but revenues falling short. the chain will take advantage of low interest rates, recapitalize balance sheet and plans to sell 500 more restaurants to franchisees. mixed quarter for adm, earnings beating by 6 cents but revenue fell short. company raising its different dividend to 28 cents per share. >> u.p.s. told us it wasn't going to be great and beat that is that what happened? >> on the conference call they're talking about surcharges u.p.s. is a confounding situation. my charitable trust owns it wish we didn't. main reason i don't, u.p.s. is one of those wait until next year stories. you believed in them two years ago when they fixed things they

come back didn't fix. the most recent holiday season disappointing. and there's kind of like nothing. whatever they do right now, i don't know how to get it back up other than a big dividend boost or a substantial buyback. i'm not hearing anything structural that will make me feel like they'll do the right thing. >> jim, february now, right, because yesterday was groundhog day. mostly the earnings we've gotten, how would you -- you say it was pretty good? what is outlook for the year in terms of what kind of gain you think we can put up for the s&p? is it high single digits? >> i think it's possible. look, the domestic companies like auto nation just unbelievably good. no doubt about it they were terrific. the international is case by case. and the currency was hard to figure out. oil's a big part of the s&p in terms of earnings and earnings were very disappointing, as we see coming out. you were talk go greece. say that greece actually plays ball. let's say that germany gives in a bit.

saw green chutes in japan because of lower oil. all this could mean as visa said a great fourth quarter because that's when spend willing come in people realize we've got more money because of gasoline if it stays here what happen we're seeing now is the churning. but if the second half is really good, we're looking back and saying why didn't we buy the churn? >> we could do that 2.6, 2.7 and end up with over 3 and we could average 3, which would be a shocker. >> yes. remember, interest rates are still down people only think -- freak out about that. i look at companies that yield 3, 3.25 like a proctor & gamble, come down really hard here. i mean proctor & gamble's largely a case of raw costs. could be good in the second half. haven't seen the big gains from oil coming down. only the oil companies do poorly. down 43% from their high for the most part. i think that this is not the time to turn tail. i think there was a page turn when we went into february due to the fact that the germans are

blinking. if germans blink, europe comes back on maybe china comes on. we'll regret we wholesale dump stocks because january united states horrible. >> we don't do the nfl indicator anymore, stop doing the january indicator soon when it's -- >> i think january's been a false tale for a bunch of good years. look, when talking about washington, i think that look, washington's dead on arrival if we don't are to worry about taxes for the rich a tax reform that doesn't work get them off the front pages and accepting the third year of a president has always been good. january, false tale. earnings get better as we realize the dollar's going to be strong. things get adjusted next thing you know you left the table at the wrong time. >> i like that. that was the most succinct person who has put that together yet, thank you. up 60 today, after a good day yesterday, maybe. we'll -- we haven't got that far to get back to highs either.

we could be there -- you know you blink, we could be back to the highs. >> rest of the quarter reports going to be good they're domestic. >> right. retail. >> yep. >> okay. >> thank you, guys. >> see you. >> guess what? i found out what the special sauce is for the mcdonald's big mac. >> tell me what it is. >> store bought mayonnaise some other ingredients, i'll give you rest as soon as we come back. stick around. >> low fat? >> i don't think so. i think this is full fat. i'll tell you the rest of the ingredients. forget your local pizza guy. beyonce is ready to deliver dinner to your front door. really? tomorrow on "squawk box," straight from the gut, jack welch, our guest host. "squawk box" will be right back. financial noise financial noise

financial noise

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four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. beyonce, apparently getting into the male delivery game. the singer's partnered with her trainer to launch a new vegan meal delivery service. and meal prices range from $9 to $17 apiece. the company's called 22 days nutrition. a reference to the belief that it takes 21 days to break a bad habit. >> 21 days?

>> three weeks. >> makes sense. >> yeah? >> yeah. i think i've broken that habit in three weeks. >> what's in the special sauce. >> special sauce, i have it it's online actually. store-bought mayonnaise sweet pickle rel live remember the pickly stuff? >> yeah. >> it's not ketchup yellow mustard, whisk together add onion powder paprika to give it the nice coloring. that's where you get it. i don't know. doesn't tell you the exact amounts of each. that's where the -- >> that's the secret sauce. >> glad it's a secret. otherwise it wouldn't be a secret. >> right. >> not going to come on any of beyonce's stuff. >> probably not. >> better not. >> make sure you join us tomorrow. "squawk on the street" begins now. good tuesday morning. welcome to "squawk on the

street." i'm carl quintanilla with jim cramer at new york stock exchange. we'll hear from david faber in a moment on breaking news. a lot to work with. euro's at a two-week high, u.p.s. warning again, oil above 50 wiping out its losses for 20157 wti at 51.17. continue year back to 1.73 or 4. road map with oil trading higher. bp better than expected results. we regoare going to hear