brenda. good morning. 8:00 a.m. at twitter head quarters in san francisco, 11:00 on wall street and "squawk alley" is live. ♪

♪ welcome to "squawk alley." joining us henry blojette, founder, editor at business insider. >> great to be here. >> jon fortt, kayla tausche. interesting show. markets performing pretty well. dow up 150, gone positive for the year. broader market making back some losses from yesterday. those ecb comments on greece, jobless claims better than expected again, ahead of the jobs number tomorrow and then a lot of earnings, dunkin', sprint, yum, lifting those stocks, 20th century fox sliding through the session. coors down in the premarket working back. some of the guidance on comps is a little disappointing. some of the luxury retailers like coors and taven ifeny and ralph lauren have been raising

questioning whether tourism from europe or something else. >> some of the data for the month of december, the holiday season spending presaged what we're seeing today. there were some signs that maybe for retail earnings would be as bad as it has been. the one thing i keep hearing about this morning from traders in the market is labor costs rising 2.7% for people who are looking for a sign of inflation, for a sign of wage growth, perhaps they're saying that's a better indication that maybe what we'll see tomorrow is some wage growth out of non-farm payrolls. >> anybody who is a member of this economy should be cheering that. time we had wage growth, more ceos stepped up like aetna recently give people a voluntary raise from $12 an hour to $16 an hour saying it's not fair that you work for one of the biggest 50 companies of the world and you're poor. that would be great for this economy if more companies did that, took their record profits and reinvested them in their people. >> you're probably not the best person to ask about wage pressure in your industry,

right, fast-growing media, digital media, you must be feeling it. >> carl, talent is expensive as you well know. it's no question. >> walked into that one. meantime twitter is set to up veil a deal with google in an effort to monetize its service. the stock trading higher ahead of earnings after the bell tonight. we will have dick costolo on "squawk on the street" tomorrow at 9:00 eastern time and talk about all the flurry of news preearnings, the google deal, the memos about how poorly they admit to have handles trolls on the site. >> lots of people are wondering why all this right now? the defenses of costolo, this revenue deal coming out, you know, somebody seems to be maybe expecting something like this over the past couple days the way the stock has been trading. and this twitter/google deal, sure they've done something like this before, but in this environment, i think yes, it's exciting for people looking for revenue, twitter's revenue team has been doing really well all along. stra tegely, though, there are

potential downsides. there's a reason why facebook doesn't give up its data to search engines, why apple doesn't license its operating system to all the hardware makers that want it. it's strategic. that cat is hard to get back in the bag once you start giving away direct access to your data that way. you hope twitter knows what they're doing here. >> i thinks the troll news is perhaps the most interesting news from the company's strategic standpoint because costolo saying in a memo we've, quote, sucked at this for a long time and he says we're going to start kicking off users left and right. the thing about trolls, they're active, not just the [ inaudible ] people saying mean things to people and abusing them and making the -- making a lot of people leave the site. do you think that will dent user growth if they start kicking these people off? >> it will improve it. it's one of the most unpleasant things about twitter. maybe you don't get it but jim cramer, he gets it alls the time. >> you guys have talked about this. >> it's just so unpleasant. and as i've sid before, it's

like people who would come up to you in person even if they didn't like you and be at least modestly polite, just turning to complete dooush bags behind anonymity and snipe at you. if they can do something about it it becomes safer, people feel welcome, share, not going to be attacked for saying something, that's good for the service. >> when we think about the stock and read through perhaps to earnings, is this a signal, you think, that the churn in core users is hurting them? did they put this out ahead of time so they can say, yeah, our growth numbers aren't that great, core users are going away, we know it's because of this problem we have, we've already talked about it and working on it? >> the big problem with twitter from the beginning and perception point of view, will it be the next facebook, still a niche social network? people addicted to news and following celebrities. that's what it's for. the idea was, it's going to be bigger than facebook. there's no reason for it to do that. but it still can be a great

business as you pointed out. i think that you're right, it sounds like maybe there's more issues on the user growth side, coming out, being aggressive about saying look at all these amazing product improvements we've made recently. it's going to get better going forward. the business side is good and why it still has a $20 billion market cap. >> niche as it may bes, it's a 300 million person niche. >> it's huge. >> and relative to facebook which is not in the same league. >> some of the metrics on impressions over the super bowl, tens of billions. >> yes. and if they can somehow figure out some way to collect money for each one of those impressions then it starts to make a difference. otherwise, it just really doesn't. >> i worry about this nonlog in user line they're pursuing. incorporating with google is only going to boost that, right? if i'm getting real-time twitter results when i go a google search and click on that, doesn't matter if i'm logged into twitter or not, active or not, i'm getting some piece of information that's going to look good if they're showing off that

metric. as ebay has shown us that can be transitory. ebay relied too much on google search results. when that went away that was left without -- >> that's right. they would not be paying for the google inclusion which would be good and if they can find some way to make the ad unit travel with the tweet, so that suddenly on pretty much every google pain you search you're getting some tweets with ads in them, okay, then it starts to become powerful. if it's just first of all you think about the cub sent of searching for tweets or having them come up. hard to see how that's relevant for google users. how do they make money from it? >> certainly the stock above 40. really only for the third or fourth time since thanksgiving of last year. tune in tomorrow, of course, for our exclusive with dick costolo right here on "squawk on the street" at 9:00 eastern time. under armour out with results beating estimates on the top and bottom line spending half a billion dollars to buy my fitness pal, a fitness app. take a listen to what ceo kevin plank said on "squawk box."

>> there's so much energy about people tracking themselves, measuring themselves. as much as you hear about fit bit and apple windchill and all these devices, one thing we believe there will always be a better device, someone in the garage, lab, working on the next great product, the next great widget mouse trap. we decided the value is in the community, a place where we weren't tied to an electronic but we could be the destination. regardless of whatever you had it would plug in and read and synthesize that information as easy as possible. >> 19 quarters of 20 plus percent revenue growth. and now making a big bet on wearables. >> $700 million on these apps in just the last two years, putting real money to work here. perhaps the growth is in the community. i'm not sure if you guys have used my fitness. >> i have. i use it every day. >> it's an amazing app. tried it? >> i have not. >> but this also, perhaps, puts run keeper in play. two of the apps up near the top

when you look at integration with the wearable devices. nike clearly had its fuel band already, stepped back and decide to focus on software, buying this under armour puts themselves in the hunt as we await the apple watch and other wearables. >> these will be very tough, though. first of all, kevin's point, made the point about hardware versus software, that's very smart. going to the hardware tough, very tough, different on the software side. the app game is just fundamentally different than making cool clothing and to retain great people and have them keep this app being dominant over time that is a different business. it is tough. it's going to be tough i think for them to do both sides of this. >> how do you see them operating this, henry? do you see them five years down the line making a smart shirt, having it be an under armour community, rebranding it into their core business or do you see them just running a portfolio of these items? >> i don't think -- i think it's difficult to run a portfolio of

items so totally different like that. i think the idea of being hardware agnostic is good, but now if they're going to jump in bed with a particular app as that app has to stay number one. as jon pointed out, people come up with apps all the time focused on just doing that. it's going to be difficult, not impossible, the company has done incredible things in the core business. >> people expected it ten years ago. >> great power to them for taking risk. it's going to be difficult. >> we could look back on this as their amazon prime moment. there's an argument to be made that going forward, if you're a company in this kind of space, you to have this kind of play. software is fitness equipment. they will be able to upsell all kinds of goods from this. they will be able to connect to what people are doing, sorts of new exercises they're doing and get ideas on product development from that. so i mean it could be that this is really, really smart. that tends to be where -- >> it could. let's not underestimate the difficulty. go out two years. >> that's why we keep you guys sitting on opposite ends of the

table. >> jon steinberg were here he would say i told you about my fitness pal months ago. >> good seeing you. >> and you. >> meanwhile, amazon delivery drones, google delivery drones and now alibaba delivery drones. eunice is in beijing with more from the chinese e-commerce giant and the test that took place over the last couple days. eunice? >> yeah, that's right, kayla. when it comes to drone deliveries, alibaba is jumping in the fray and stepping up the competition. already the chinese e-commerce giant has partnered with a local courier service to really come up with this experimental testing programs to test drones to deliver small packages. like i said they're starting small. this is an experimentation. they are starting with a three-day trial in three major cities, including here in beijing. they are going to start with lightweight ginger tea boxes. these are going to 450 customers. and the deliveries are supposed to take place within an hour.

so far there's been i would say a healthy dose of skepticism about the program by the public. most people have been talking about how amazon has had some regulatory issues in the united states because of the concerns over safety flying these drones and the deliveries. and in china, the regulations are also very, very tight. in fact, the first flight for one of these drone deliveries failed here in beijing because of the restrictions of flying drones within the city. and, in fact, china's -- the chinese government is very sensitive about flying any objects and, in fact, during major government conferences even kite flying is banned. so a lot of people are wondering where this is all going to go and, in fact, alibaba itself has said that they recognize that drone deliveries are not yet ready for commercialization. guys? >> eunice, thank you so much in beijings this morning. coming up, what is the

future of apple tv? physical television service, another piece of hardware? re/code's peter has some exclusive details. the fcc chairman unveiling what he called the strongest open internet protections ever. what does the commissioner think? the commissioner will joins us first on cnbc. i want to break free, "better call saul" the breaking bad spinoff debuts on sunday. two of the stars of the show join us in a few minutes on "squawk alley." dow up 155, up 655 points this week. best week for the dow in 4 1/2 years. we're back in a minute. 73% of americans try... ...to cook healthy meals. yet up to 90% fall short in getting key nutrients from food alone. let's do more... ...add one a day 50+. complete with key nutrients we may need. plus it supports physical energy

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welcome back to ska. check out o'reilly automotive. the stock is surging after the company reported better than expected fourth-quarter results. shares are up by 10%. that's providing a halo effect to other auto parts retailers as well. you can see there, advanced auto parts, auto zone, moving to the green in today's trade. back to you. >> people buying cars and fixing them pup. >> apple already entered the content delivery market with apple tv but our next guests says they are in talks with tv programmers to allow apple to offer an over-the-top pay tv service like cable over the internet. peter kafka senior editor at re/code. thanks for joining us. we've had all kinds of rumors about apple over the years, are they getting into tv, building a tv? the epics deal that was rumored way back that people thought was

going to be a tv. do you think this has legs or are they just putting feelers out on something early? >> they've been circling for tv years. i wrote about this in 2009. they're serious each time, but haven't been able to find out how to crack the tv industrial complex i call it. i don't know if it's going to change this time. there is a model for this. before it used to be impossible to imagine how you would sell tv over the internet with the cable guys allow it. they are allowing it now. dish has a market, has a product in the market today, sling tv, sony coming out, they're selling tv over the web. do it without being the classic cablep operator. no reason apple couldn't do this if they wanted to today. >> why would you want to? apple's core customer has money, probably have cable at home already. you would have to replace multiple set top boxes in your home i imagines to cost justify it. is there a lot here that apple would have to line up to make it make sense or do you think they would just say, oh, maybe 30

bucks a month, here's a separate cable type deal just for your mobile devices? >> i think if you're apple you do this because you don't want sony to take away that customer, don't want dish to take that customer, why wouldn't you want this and strengthen that ecosystem. the same reason they will sell streaming music this spring. they would rather sell it than have someone like spotify sell it. >> what's the level of commitment and the odds this attempt ends the way the previous attempts have, where they say it's not the right time and not the right product? >> depends what apple asks for. extreme things that aren't available somewhere else, they're not going to get it. the tv guys are not the music business back in 2003, they're not weak, not going to offer apple big concessions. if apple wants to pay what cable guys pay, like dish and sony. >> parallels to dealing with the music business back in the day gave apple a reputation of being a savvy negotiator on content deal. this is not that. >> this is them saying we're

going to pay market price. depends what they ask for. i don't know the full extent of what they're asking for, broadly what i'm hearing something similar to what dish is doing, sony is doing, saying we want to bundle together a bunch of stuff you're selling the way you sell it, we just want to deliver it over the web. >> would it change the way we become familiar with the hardware, the product? >> that i don't know. >> that i don't know. i don't know. the people i foe who have seen the product are talking ability the interface not boxes. the two can be separate. you don't need a special box. i've used sling, haven't used sony but you don't need a special device. >> is this the eddy cue show? we have jimmy iovine on the music side. expecting a subscription music product in the nearer term. is ededy cue leading the charge? >> if it works it will be ededy cue's things pushed by tim cook. jimmy has his hands full with music. >> peter, thanks. we'll see how this works out. especially wonder in light of this kind of revamped beats

integration into itunes hearing from nine to five mac, whether planning a one-two punch, music first and then tv, since tv is hard to put together. >> music is farther a along than tv. a lot of networks that haven't started talking to apple yet. >> thank you so much. >> on the same day jpmorgan says we might get some late it february event, watch related. a lot of pots boiling over there. >> after apple hitting an all-time high too. what more can be affecting that company? when we come back after the success of "breaking bad" amc hoping for a winner this weekend. >> i just had a case with three clients, rainman, jury trial, the whole nine yards. you know what i took home? 700 bucks. i might as well head down to skid row and sell plasma. >> representing people that have nowhere else to turn. >> money is not beside the point. money is the point. >> i keep telling you, have patience. there are no shortcuts. do good work and the clients --

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i was in that court back there saving people's lives. >> gee, that's swell. and thank you for restoring my faith in the judicial system. now you either pay the $3 or you go back inside and get an additional sticker. >> fine. you win. hooray for you. backing up, i have to back up. i need more stickers. don't have enough stickers. >> that is a clip from the hotly anticipated "breaking bad" spinoff "better call saul" premiers this sunday on amc. joining us at post nine two of the stars michael mckean and jonathan banks join us. great to see you, gentlemen. >> nice to see you guys.

>> dealing with three gilligan aficionados. we could not be more excited ate this show. >> good. >> how far back do you go? >> season one. >> they never get off the island. >> is that how it works? >> yeah. >> were you also "breaking bad" freaks? >> no -- yeah, as viewers, yes. >> they did not employ me. they saw fit not to employ me. yes, huge fan. >> and i assume that's what drew you to this project among other things? >> you can call it a product. we are on wall street. >> on the new york stock exchange. what drew us to this was a lot of money. all right. let's get that straight. >> so these days, what else is that drawing you to? is it drawing you to twitter, facebook, the fan ep gaugement that's been so huge for "breaking bad"? >> i have lovely long -- >> one of the legal pad with the pencil. i do tweet under mj mckeon. >> i said something notty about wall street this morning. >> i'm sure there's more to come. we talk about the new companies trying to get into the content

business, trying to make it look easy, but what's the formula for a good show? when you see a script what makes you think this is going to be a hit? >> there's no way, william goldman says nobody knows anything and he was right. he's the only guy that's ever been right about anything as a matter of fact by saying nobody knows anything. if you read a script and it gives you something to do you haven't done before or might be amusing to do and they actually sign a paycheck at the end of the week that's a good job. >> we have wonderful writers. vince gilligan. you said you were gilligan fans and i make a comment, but my god, we have the most wonderful writers and they -- it's interesting. i've watched them over a period of time. they're not complacent. they continue to set a standard for themselves and learn and learn. there's no other way to put it. vince gilligan, when he's done,

he's humble, and not false humility, he watches his directors but he edits nd and sits in that editing room and learns and learns and learns. i dare say that the opening scene of "better call saul" is -- >> it's a beauty. >> good. >> michael, i grew up watching you on abc. totally different era. but i just wondered, did you envision television being a magnet for artists this late in the game? people thought broadcast television was going to go away. >> yeah. it was kind of a freak show when somebody from the movies did something on tv. lawrenurence olivier and kathar hepburn did a tv movie in the '70s and it was like the world had ended. what is going on here? we're through the looking glass people. it didn't stick because it's not the same kind of thing. listen, tv has gotten exponentially better recently. it's also gotten whatever the word i said before worse.

if you think about it. no amount of great tv is going to kill off the crap tv that, you know, still rules. >> you don't have to watch it anymore, right. used to be you had to get through the bad stuff to get to the good stuff. are we in a golden age of tv? "breaking bad" didn't take off initially. was it kind of the social digital conversation that helps things rise to the top now in a way that was harder before? >> i have a question. is he saying he doesn't like my barnaby jones. >> doesn't care for it. >> is that what he's saying? >> passing on most of your tv work until "breaking bad," john. >> all right. >> i don't know. i don't know. is the short answer. >> okay. >> yes. is the answer to that is the golden age of television and i don't care how pretentious that sounds. i taught a class, believe it or not, because they'll have anybody at a university, and i was surprised and heard it before, so many of the film students are more interested in television than they are in the film because right now, oh, my god, there's so many good shows.

>> yeah. >> so many. >> give us a teaser for "better call saul" for those who loved "breaking bad," what will they get? >> violence from me. >> implied violence from me. >> can we just -- it's very important to me, here we are on the new york stock exchange and if you ever doubted that the stock market had done well, there is not one person on this whole floor that doesn't have great teeth. great teeth. they've all had them fixed. >> like cora's girls. >> spoken like a true act tore and observer of humans and their behavior. >> i'm astute. >> and he is human. >> is there a challenge to -- i'm always thinking about spin offs from previous tv shows, "after mash" didn't work. is there something about doing a prequel that is challenging from the narrative structure? different? >> we don't have to write it, but vince had always thought about the early years of saul goodman who is known as jimmy

mcgill, as our first episode will tell you. so i think he always had some -- there's always something going op in there. >> what's it like working with [ inaudible ]. >> amazing. i've known bob 20 years and never spent a ton of time together. i did one episode of "mr. show" which is still the standard for sketch comedy on television in my opinion and he's a lovely guy and one of those funny men who knows the history of funny, who knows -- who can talk about comedy going back to the silent days and before, you know, as good as anyone, as well as anyone. >> now, i wonder, jonathan, for you, it's got to be fun in a prequel because people know kind of the munster that you become and you sort of -- >> lighten up. >> you're even dressed like anakin skywalker. >> there are people that love me. >> i did. >> isn't that fun? like seeing bruce banner pre-hulk in a way, right? just seeing you in a parking garage, kind of --

>> jon, michael, mike, has been mike for a long time, even as far as the prezell goes, there's what you learn about is a little bit more about why mike is mike and just how he lost his soul. >> that's just cat nip right there to anyone who loves "breaking bad." thank you. >> you're welcome. >> we cannot wait. sunday night, amc, "better call saul." thanks. >> i have one more thing, don't let these guys push you around. do you understand. don't let them push you around. reach over and slap them. >> i'm going to take that to ap heart. don't mind if i do. >> she doesn't need your help. >> i know. she's the toughest one here. >> thank you, twice. >> you're welcome. >> thank you. >> let's count you down to the close in the uk and across continental europe. happened moments ago about greece. the athens com pos sit down sharply after the ecb canceled acceptance of greek bonds in

return for funding. mixed map. greek and german finance ministers meeting in berlin today to discuss athens push to renegotiate greece's debt. german's finance minister said they agreed to disagree but in response, his greek counterpart said they didn't even agree to disagree. what will we make of that? germany insisting greece stick to the bailout agreement so the tensions continue there. but there is a deal in the telecom sector moving the market. take a look at uk's bt group. that company agreeing to buy ee, britain's larmgest mobile phone network. the deal about $19 billion and bt is up 4.25%. ee is the joint venture between germany's deutsch telecom, france and certainly the market is taking that as positive news. >> the chairman of the fcc unveiling an internet proposal. stocks moved on that news. current commissioner ajit pai

with his take on the proposed rules in a minute.

siding with president obama fcc chairman tom wheeler says federal regulators will reclassify internet service so that it can be regulated like a utility and allow the agency to set new rules of the road known as net neutrality. the agency will vote on the

proposal this month setting up a high stakes standoff with the telecom industry. joining us now in a first on cnbc interview, fcc commissioner ajit pai, now you've been against title 2 reclassification for internet but tom wheeler has said, fcc can make some tweaks to make it work the way it should. how do you feel about this proposal, you know, some cable stocks were up yesterday on the news? >> well, i think what people have been reacting to is, a spin about what the plan is. we haven't seen it, however, and the devil is going to be in the details. we do know it is going to involve as you suggested title 2 regulation of the internet and i'm opposed to president obama's plan for internet regulation because it is going to make for slower broadband for americans, increase their internet bills and will reduce competition in infovation in the broadband marketplace. >> it does appear though that there is a burden on internet service providers in the the

basics of what we've seen in the last couple days, but there's some watching the cable industry saying, you know, it could have been worse. where is the burden and how strict in your opinion is it actually when it comes down to those details? >> there are two separate problems. the first we don't know what the plan is. president obama's plan to regulate the internet is hidden from public view. in fact the american public is not going to be able to see it until the fcc adopts it in three weeks. that's a problem because here the uncertainty that's going to surround the internet economy will persist for some time. what we know about title 2 it is heavy-handed regulation that will shut a lot of small and independent entrepreneurs out and for those that remain it will apply the rules that were developed for railroad monopolies of the 189th century into a competitive marketplace in the 21st century. the question is, do you want to bring ma bell back to life in the digital age? i don't and that's why i don't want to treat the broadband

marketplace today as if it were a monopoly. >> on that note it had been reported other commissioners were taken aback by wheeler's stance in that op-ed. were you? >> i think the writing had been on the wall since president obama formally proposed his plan to regulate the internet in november and i think at that point the independence of the agency was severely compromised. what you saw unfortunately yesterday was a for merrily independent agency ka pit tu lating to pressure to solve a problem that doesn't exist. >> that's kind of harsh criticism for a house you live in. >> well, unfortunately, the independence of the agency if you look at the article that described how we got to this path makes clear some of the independent voices of the agency had a different view of things and there was some room for the agency to take an objective look at this but once political actors inject political considerations into our decision-making process, then essentially you make the agency an extension of the political branches and that's an

unfortunate place to be when talking about a dynamic part of the marketplace where regulation historically has been restrained. >> well, ajit, we've got in broadband something that almost everybody uses nowadays and almost everybody feels like they're paying too much for it and the cust mr service isn't that great. it's set up for the situation where people want regulation. how at this point do you make an argument for more market-based activity, for more competition versus more regulation? >> you've put your finger on the key question. when i've traveled and talked to start-ups in kalamazoo, michigan, consumers in college station, texas, when they say net neutrality the concern is about competition. more choices and better prices. the problem is tight 28 regulation gets you in the opposite direction. tight 28 was designed for a monopolies and part of the problem is, that a lot of the would-be competitors who want to enter the space and increase their investment in networks

will be less likely to do that if they have to deal with common carrier rules. i propose a number of different ways for us to get at that problem by removing some of the barriers to deploying broadband infrastructure which is difficult and time consuming and perspective. those are the types of market oriented solutions that would solve the problems most people are concerned about when they use the slogan net neutrality. unfortunately title 2 takes us in the opposite direction. and you only need to go to europe and makes the comparison to the utility style regulation europe has to see that broadband marketplace in america is superior and i would argue superior precisely because of the long-standing bipartisan commitment to light touch regulation. >> but at this point, commissioner, is it irrelevant to be so critical of what appears to already be done? how many changes at this point do you expect to be able to make to a plan that mr. wheeler appears to have already put together? >> well, i certainly hope that over the next three weeks, before the vote is formally

taken the chairman and my fellow commissioners will be open to a dialog and i think that if they are apprised of all the facts, for example, the comparison between the u.s. with its free market approach and europe with its utility approach they'll come to see things my way and in addition to that, there are a lot of legal hurdles that we will have to cross if the president's plan to regulate the internet is passed. that's going to embroil us in years of wasteful litigation, create a lot of uncertainty for the internet economy and hopefully that is a factor that will play into considerations as well. >> it will be a busy three weeks. commissioner, before we let you go, the thing that the market is trying to parse in addition to what these rules look like is, what it means for some of the deals on the table, comcast purchase of time warner, comcast being our parent company, here at cnbc, any take on what this means for a deal that large and that would be very meaningful to the market? >> unfortunately, because those transactionships are pending before the fcc i can't comment on them or what effect other

proceedings like net neutrality might have on them. i'm focused on the effect that this particular net neutrality proposal the president has outlined will have on the overall broadband ecosystem and we'll evaluate each transaction on the merits when the time comes. >> we want it better, faster, cheaper, see if regulation will get us there. fcc commissioner ajit pai thank you for joining us. >> thank you for having me. >> watch dupont getting close to an all-time high. dominic chu at hq. >> did reopen for trading. the stock halted on news it named two to its board trian run by nelson peltz nominated its own directors for the board and refused to consider any proposal that didn't include peltz as a possible candidate here. as a result shares up by 2%. still it's open for trading and up by 2% after that news. back over to you guys. >> very pointed language in that filing. thanks. >> when we come back what do mark an dre san and snoop dogg

have in common, big-time invest r investors in the company we're featuring next. robinhood. the ceo will join us later on. rick santelli what have you got your eye on today? >> of course we're going to have to talk about the sad good-bye, doesn't mean the floor of the cme group in chicago's disappearing but portions of it indeed are and it's been a good 167-year run and we're also going to talk about the big number today. and the big number is? 0.8. what is it after the break. yoyour friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped

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coming up at the top of the hour, trading the retail roller coaster. ups and downs in the names you should be buying and selling today. plus, the real risk of greece. we talk exclusively to the ceo of france's biggest bank about the future of the eurozone. and it's the end of an era the at cme. the closing of most floor trading means to the markets. we'll see you in about 15 minutes or so. >> sounds good. thanks a lot. over to the cme group in the meantime and the santelli exchange. hey, rick. >> before i even get to it, scott just said most floor trading is stopping and i'm sorry, but that is incorrect. you'll hear why in a moment. before we get to the cme group and the floor issues of the day, i would like to point out one fundamental that we saw. we saw a drop in producty even though a positive revision, the preliminary fourth quarter, a positive revision to our last

look. in the end, when i said what's the big number mean today and it was 0.8, 0.8 is the productivity for all of 2014 based on current data. and it's just on the light side. over the last 30 years the average has been closer to 2%. everybody knows that. why is it important? think japan. without productivity the silver bullette is gone. to the matters at hand the trading floor will change. anybody who hasn't seen it coming hasn't been paying attention. i'm on the floor as much as any other human being on the planet and these futures pits have really gotten thin. but where does the story start? quickly, the story starts throw this up on the screen, please, it's about demutualization. when a mutual company owned by its users, members converts into a company owned by shareholders in effect the users or members exchange their rights of views for shares in the demutualized company. that's where it began and the first to demutualize and go public in exchange was the cme

in 2002, followed several years by the chicago board of trade and then ultimately the cme bought the board of trade, the rest is obviously history. but, to address what's going on here, you need to lock no farther than the entire definition of demutualization. in other words, members here sewed the seeds of their own constructive deconstruction. what do i mean? in the old days when for profit rice pit and the members had opportunity to make money the rice pit stayed. when you become shareholder driven the shareholders look at the revenue of the rice pit and say it doesn't stay. so it really then shifts from your end user and your members being the priority of all your decisions to ultimately shareholders. is it a good thing, bad thing? doesn't matter. not for me to say. one thing i can say, is yes, those futures pits were mostly empty. issues about things like membership rights and the costs but those details will be worked out. one thing i will tell you, look at the cboe they have two large

option pits with people. all the other ones are gone because they have multiple listings, no multiple listings here. they're not going to lose the options any time soon. that's my opinion. back to you. >> all right. thanks so much, rick santelli. in chicago. when we come back, our next guest's app claims to let you trade on your phone without any fees or account minimums. you heard that right. his company backed by an dre sen and horowitz and snoop dogg. "squawk alley" will be right back. we live in a pick and choose world. (hi!) choose (hello!) choose choose. but at bedtime? ...why settle for this? enter sleep number, and the ultimate sleep number event, going on now. sleepiq technology tells you how well you slept and what adjustments you can make. you like the bed soft. he's more hardcore.

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our next guest's company has its sights set on the young investor offering zero commissions on all trades through its trading app robinhood. joinings us is co-ceo of robinhood whose apps features an dre sen horowitz and a couple rappers as well. good to see you. >> great to be here, kayla. >> i read in your bio you started on wall street, you were building, trading platforms for the biggest financial institutions. what problem did you see that led you to create robinhood? >> that's right. so we saw a couple of problems. one of which was that people in my age group, the millennials, weren't really getting into the market and in many cases were openly distrustful of the institutions that were providing investment services to them and the second problem was just that the costs were so high and the infrastructure was so out of date for providing these services, that there was a big opportunity to provide this

service to a new generation of investors using a mobile inters face without charging any commission fees. >> so how do you make money? because the traditional retail brokerage platforms charge 7 to 10 bucks per trade and that's their model. if you don't have that revenue stream where do you get money from? >> so brokerages are like banks in a lot of ways. they have multitude of revenue streams other than commissions. and some of those come from value added services on top of the pure trading infrastructure. so those include services like margin lending which we intend to roll out over the next few weeks and months and they also make money off of interest generated by uninvested cash in customer accounts, much like a bank would do. so the ability of us to do this, just stems from the fact that we're fully electronic, we built this business from the ground up to be as efficient as possible, to execute customer orders as efficiently and swiftly as possible, and that removes a lot

of the human touch points that lead to these legacy incumbents having high cost structures. >> is the business model built on the idea mom and pop as a demographic come back to stocks or all about stealing share from the entrenched competitors? >> that's one of the things we've been excited about with the response to robinhood and since we have announced the service well over half a million people joined and those people look very, very different than the typical customer of brokerage. they're in their early to mid 20s, means cases first-time brokerage account holders, and other services with their high minimums and commission fees make it hard for these types of customers to even get started, so what we see as the big opportunity is the 80 or 90 million millennials that haven't started investing getting started with our service. >> those sounds like exactly the sorts of people who should not be trading on margin. are you taking on more risk than

you should? will you be encouraging these novice investors to take on more risk they should to make money down the line? >> definitely not. we're fine with not every robinhood customer bogey a margin customer and the behavior is not so much people putting in tens or hundreds of thousands of dollars investing it all in individual stocks. we have people gradually investing small to medium sums of money over time and people are investing in e it t etfs and individual stocks. over time some of the customers might have value from margin, but not all on day one. >> sure. you certainly gotten the attention of a lot of people on the floor. we've keep our eye on robinhood. come back soon. >> thanks very much for having us. >> co-founder and co-ceo of robinhood. >> twitter, gopro, a lot more on those names in just a minute.

so, how do you feel about cash back? i would not say i'm into it. but let's see where this goes. [ buzzer ] do you like to travel? i'm all about "free" travel, babe. that's what i do. [ buzzer ] balance transfers -- you up for that? well -- unh. too soon?

[ female announcer ] fortunately, there's an easier way, with creditcards.com. compare hundreds of cards from every major bank and find the one that's right for you. creditcards.com. it's simple. search, compare, and apply. [ ice rattles ] lot is going to happen after the bell. linkedin, twitter, gopro, buffalo wild wings, reporting earnings. we'll talk to dick costolo tomorrow morning at 9:00 eastern

time on squawk on the street. that's going to be the headliner in terms of after the bell results. >> absolutely. twitter is huge, but linked in also, 4.5% away from its 52-week high. high valuation, a lot of stocks doing well now but those earnings key to watch. >> gentle giant in the back ground as controversy surrounds other social names. the markets up 158 points on the dow, we forget a lot of that is from pfizer reaching a deal to buy hospira for $90 a share, $15 billion, we haven't seen a deal of that size in months. >> no. health care, u.s. m&a, this time last year $16 billion. it's an active space. i just every day crude oil amazes. it's up almost 7% today. after yesterday the biggest one-day drop since november. we talk about volatility but that's really where it's at. the correlation between crude and equities has increased over -- since the decline began in july. >> used to not be correlated

over the last 25 years according to art hogan and now it's increasingly core lated as we've seen with the s&p. >> another one to watch, gopro, of course. it was way up, way down, where does it go from here. >> 60% short. in that name. >> and a jobs number tomorrow. over to the judge and the half. all right. thanks so much. welcome to the halftime show. let's meet our starting lineup for today, stephen weiss, managing partner of short hills capital, jon and pete najarian, co-founders of optionmonster and courtney reagan has our retail roundup. our game plan, greek risk the ceo of france's biggest bank in a cnbc exclusive. on the future of the eurozone and b and p paraba's plans for the u.s. trading places. >> now. >>