town and their future. >> thank you for coming in. >> thanks for having me. >> who is on the cover? >> neil. i know neil. >> thank you guys. >> are we -- i'm supposed to say good-bye. the show is over. we're going to wish jim cramer a happy birthday. he's coming up right now. "squawk on the street" begins right now. ♪ good tuesday morning. welcome to "squawk on the street" i'm carl quintella. with david faber and jim cramer. 60 years young today. >> thank you. thank you. >> knocking off the ball. >> what can i say? >> you can raise your hands like rocky right now. >> the scrolldown takes forever. scroll down oh my geez it takes me ten minutes to get to 1955. >> free markets in a bit of a party mood. the reports that taking on a

conciliatory zone in the e.u. meeting this week. got good news in travel as well. oil's in the red. united airlines raising its fuel cost projections this morning. we'll talk more about that. and the ten-year yield, a two-year handle since january 8th. oil lower as the iea offers a mixed outlook on the future. >> shares of coca-cola higher in the market after the company has expectations but is calling 2015 a transition year. we'll tell what you that means. cvs health higher than trade. and ceo said it was the right decision to stop selling tobacco products. first up futures rising in hopes for a greek debt agreement. a proposal for a six-month debt extension for greece as euro leaders get ready for the meeting tomorrow.

crude's down after the iae said there may be pressure. the greek meeting very interesting, jim. >> remember i think we're going to get a resolution which is a big stretchout. that is what we've seen period click with like the railroad that got in trouble in 1800. we've seen stretchouts where you kind of reconfigure. that's been from time in memoriam. that's the way you get around this which makes it so you're still made whole. but you get an easier time. okay? so that's kind of what i offer -- offer, by the way, by the russia. let's make ukraine -- let's take a eastern ukraine buffer no nato. i'm more for compromise. >> yeah. listen, the people i spoke to this morning who invest for a living thought it would be constructive to have that. >> that's a good strategy. >> one of the things that happens when europe is not in our face and you could say china, the numbers, but when

they're not in our face we default to america. and you have a plate of earnings today where i'm trying to pick a single one that i don't like. suddenly, you look at this. like what's been happening in this period once again, brian said something really good briefly, since the greece thing started the markets up 75%. but when you take a step back from greece. you don't look at the futures, you look at cvs is and you say, maybe they again guide exactly perfect. starwood hot, finally doing that vacation rental spinoff that we're looking for. aeropostale -- i thought aeropostale was dead. >> yeah. >> i'm just saying look at urban. it just changes the discussion. >> so all of those who are going to write in and say, all right, redo the terms on greece. extend it for 10 volume 5, you don't have a problem with that? >> no i don't, because in the end, you know i think that you

just don't want greece could be over -- it gets overblown, because it's the one that's in trouble. but it's a small country. >> 8 million. >> yeah. it's funny, germany by the way, ultimately, it's the definition but germany has been a big beneficiary of this, with the euro down the whole controversy. and germany keeps getting better and better. so i understand how hard it is for these countries they keep winning. it's pushing out. i know let's 60 can. but, boy, kick the can worked in america. turned out to be a pretty good gig. >> yeah, so far. there are going to be the naysayers who may be here 15 years from now saying the same thing. you'll be 75 years old. >> no, no, 73. >> all right. >> hey, listen -- >> you starting to shave it down. >> my nephew he said -- i said -- i was actually 50 he said

well you're 63 uncle jumbo. i said i can't say i'm 63. he said so much better to be a young looking 63 than an old looking 50. but i am catching up to that initial date. >> yes, you are. >> do i bump it to 70? >> listen 70 is the new 50? >> you can still bench a multiple of 60. >> my father was working out at the gym until he was 89. then he was doing strength workouts not stretch. >> as do you. on the broader markets, i know mr. quintella had had something to offer but the ten-year is back to 2%. i mean it was just last week where, you know people were wondering is there a low, is there a bound? we were talking about negative yields in europe. >> but this is still so many negative yields but here we are right around 2%. >> i think this is good. rates should go higher in banks over this. i like the funds that are not flight to safety.

the flight to safety you have to remember in the greatest part of the great recession, holy cow, you're calling jpmorgan jpmorgan, not because of cyber. hacking. i like the fact that ray was hired. >> $6 billion last week. microsoft is working on $11 billion. >> what are they doing with that money? i was watching microsoft yesterday. it's been horrendous. i'm saying what's the deep end? they have a lot more buy in their buyback? what do you think is the genesis of that? >> that's part of it. i don't know. obviously companies like that can borrow almost free money. >> if you don't think you're going to get a big repatriation holiday. >> they do have money in the states as well. we always talk about that. obviously, much of is overseas for microsoft and apple.

we talked about it for years, the basic mechanism of retiring your dividend-paying stock actually given how little interest you're paying and the fact that interest payments are tax deductible can actually make it work in your favor. >> i don't understand box the way the tax code works, it is such a win. at the same time i wonder whether, you say, listen it's back to 47 and then to 41 maybe this is an opportunity. ceos come on "mad money" and they'll say, yes. like at clb. this is a stock that came in totally disappointing. just a horrible number. stock was at 88. and david denture said are you going to buy stock for the company? he goes -- this is like ten days ago. he said we're going to be in there hand over fist. the stock's at 110. >> i think back to when buffett was asked what's the best investment i can possibly make?

he said, get a 30-year mortgage. this is sort of the corporate analogy of that? >> you're so right. by the way, i wish people didn't have to put so much down. i'm just saying you need to put a big deposit. and fico scores so high i know it feels like mortgage rates. there's the mortgage rates for people doing really well. and then there's the other mortgage rate that's just out there. >> and that's been the key. the problem some would argue in the housing market, although frankly having stringent standards is something we want because we know it happened when those were completely abandoned and that was the result of a vast security market. >> punishment of the euro is we're not going down. >> we've been talking low rates. by the way, it wasn't that many years ago that we were talking about balance sheet repair for so many corporations. >> i know. >> and they worry about these

maturity cliffs that they were facing. and would they be able to refinance. it's not so many years ago pand here we are with so many healthy balance sheets. >> you never see spot secondary in order to improve a balance sheet. if i were freeport i'd do a spot balance sheet. some of this euro companies would probably do well with a spot secondary. >> they can't raise the debt market. >> yeah. it's equity. >> speaking of companies with big balance sheets coke today posting fourth quarter results that did exceed estimates. global case volume up 1% sarah eisen spoke with the cfo. she joins us on the floor with more. >> reporter: hey, carl there weren't great expectations going into the quarter for coke it did manage to beat slightly on the the bottom line. on the top line hence, the stock reaction pretty positive. did talk to the cfo, kathy waller she said there are

near-term factors working in coke's favor. number one, the low gas savings at the pump because of those cheap oil prices are helping the business. she said it seems like it helped them in the fourth quarter. and they should continue to help more money in americans' pockets going into this year. the other thing that's helping is pricing. in other words, yes, americans are drinking less soda but they are paying more it. specifically, she said good pricing realization in u.s. and in europe. but when it comes to the warning on 2015, she continued to say, if this is going to be a year of transition. her words, also we've heard that from ceo mutar kent that means they're in the middle of this plan cutting savings, and layoffs continuing. and the macro environment. carl talked about the strength of the dollar and how that will hurt about the strength of the profits in 2015. >> great wrap-up, sarah.

the 4x picture is a little worse than two months ago. >> well look they're feeling the heat. i think that was this big battleship. i kind of liked what i saw. i like the fact that they're no longer saying they're the best. i see yelp raise, with the quarter with the conference call, they were saying we're the best the best the best. what people don't hate is when you say you're the best. they love that coal coalca-cola said we're not there yet. and under the thompson regime it's hey, listen we're pretty good, don't worry about it. you see these activists comes after people who do great. i think you have to explain, yeah, we're not doing that well but we're going to turn it. and that's what i saw there. when we hear pepsico, they're going to do a good job.

>> a bigger ding to buffett's portfolio, ibm or coke? >> you know, the ibm people have a big meeting coming up in february. they can redeem themselves if they're able to say 27% of the good part of the growth if they flip that and say, listen that's going to be 54% by the end of two years, otherwise, yeah, it's going to be a bad ding. coke has made buffett a fortune. recently, no. >> by recently -- >> but jim stewart came on and he said something, he just said listen this is like the bump. it's not part of the preaching. if we had monty montgomery, if we had the guys from whole foods on right now. if we had had the guys from chipotle on what they would say, listen is this a dying thing. it's part of the food chain. but at the same time, people still drink it. >> if you're mr. buffett and you own the stock, you're talking

about a stock that is 40% in 1998. that's not so high -- i'm glad you point that out, that's not so high. >> if you bought more in '09, you did well. i don't that you did. dumping dividends, no doubt. but you are talking about a stock from '95 to '98 went straight up. >> no. >> it's basically none nothing since '98 -- well it's done a lot but if you just held it -- >> no you stand right. just the dividend -- that's not good. when we come back evidence of a pretty good holiday season for a lot of retailers. we'll filling you. also a lot of buzz surrounding the "sports illustrated" swimsuit issue. hanna davis, the model is going to join us live. the dow going for three down

days hasn't done that in a month. but if the month ended today, it would be the best one in a year.

♪ general motors harry wilson

who helped restructure gm as part of the government's auto industry task force is now seeking a spot on the board of directors of the company. the gm saying it's received a notice from wilson indicating he would nominate himself as a candidate for the board at its 2015 meeting. gm says wilson is acting with the backing of kyle bassett eamon, hg aurora. and welterconnicks. those shareholders represent 1.2%. shares looking up here. wilson's kind of become a board member for hire, if you will. lobe has used him for a while when he was on yahoo!. on the sotheby's board. again a loeb action there. wilson ran for public office in the state of new york. he is known as a restructuring

guy. my friend carl bassett has made no secret of the fact that he wants to see gm use much of its cash for a buyback, as much as $8 trillion in the near term. i will say something is interesting as a quick background on this. wilson apparently approached the company on february 3rd. and said i want to talk to you. they said okay let's talk. he wouldn't tell them who is in his group. in other words he indicated he might have an interest being on the board but they didn't know who he represented until 11:57 last night when he told them. >> why did he do that? >> i'm not sure. he has one of these -- what we're calling a golden leash, is what the bankers are calling it. he's going to get a fee. a percentage of the group's profit from their investment in gm. from the time i believe of his nomination. i think that's correct, but i want to read the filing. >> like the malkovich deal?

>> yeah. >> paid by the company. >> paid by them out of their profits. some criticize that in a broad sense saying he should be representing all shareholders. but the fact is all shareholders will benefit if the stock goes up. 2.1%, total. >> 2.1%. >> well look it's a democracy, right? they want to put him up, but they don't have to take him. >> mary barra is pretty perceptive in the times. i think mary barra was at the time a bad hand. she investigated everybody and tried to figure out who was behind the ignition key. in the meantime she has the right portfolio, done remarkably

well, and she can't catch a break. >> gas prices are going to give a lift to some of the higher profit cars. >> that's true. >> but i think her product lineup was refreshed even before gasoline. >> well is she doing better or worse than mark fields -- >> well mark can't -- you know alan was there before. but i just think that there say lot of cash there. that was a very nice dividend. >> a lot of cash they did increase the dividend by 20%. the quarterly dividend. it's now 36 cents a share. they're talking about that saying we are returning money, the shareholders for that. >> disappointed they didn't have a dividend boost earlier. a dividend boost, more than ford. people are unhappy, they want more. that's fine. i like the feet to the fire hence, coca-cola. this wouldn't surprise me it's finally going right. >> these fee arrangements i

don't like them. >> i don't like them. >> i don't like it when there's sort of a success fee for directors. >> right. and that's not what nelson peltz has done. >> elliott had it but they got rid of it. >> i'd like to be on the same page as the common. you can say that's true but i like to be a fiduciary. greece up for the first day in four as the markets are doing better with that. still to come, back in a second.

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all right. back here on tuesday. what do we got, six minutes before the opening bell. qualcomm yesterday, on the mad dash. today, we get the settlement. >> $175 million fine. >> were you? >> i kept thinking fi ging fiat saved 2 billion. they had a problem, they lost a customer but this had been a major overhang. that's a slap on the wrist because they have so much cash. >> and they have an enormous amount of business in china. it's not just the 975 million there'sal licensing agreements that are going to make it easier for chinese companies and presumably hurt their market, is that true? >> the margins should not be as

good. people see this i'm not recommending it. i think skyworks is better. corgo is better. i think there are a lot of other semis. but this has always been a growth town favorite. >> right. >> now, here's a growth hound favorite that is becoming an unfavorite. starworth, a lot of people thought when are they going to adopt a model, spinoff vacations or marriott line? okay. well, they have. and this is what happens when you do what the angry shareholders want. and this stock is not done going higher. he seemed to be like giving special dividends. he thought that was enough. just hectoring, hectoring, hectoring. you do this he responds and he gets rewarded. i think this is a better story. >> you do? >> yeah. marriott, he's taking it from there, that's a good playbook.

and windham, by the way has been great. steve holmes has been a remarkable ceo. welcome back. this is a good thing. >> we've got a lot more to watch. of course the opening bell right after this on "squawk on the street."

on the street." live from the financial capital of the world on this tuesday. the opening bell in just about 60 seconds. a lot going on headlines out of greece making it sound like they're backtracking a little bit. the credit tours saying this thing may work out. athens having a very good day. >> and what happens if there is move in ukraine. i know they all say last-ditch last-ditch. what happens? i know the answer is that you capture a rally that will capture a lot of people by surprise. we're dealing with that idea that, yeah strong growth is bad in our country. the hangover from the idea that bad -- strong growth means high rate hikes. no. opening bell about 20 seconds early. that's okay. we'll get a look at the s&p on

the top of your screen. down here at the big board, atf provider and adviser shares. and at the nasdaq mts systems a supplier of test systems and position sensors celebrating its 35th listing anniversary. wow, that's a long bell. >> they got to make it probably until -- >> yeah. so much retail news jim, that we have not gotten to gap holding, aeropostale. home depot hiring 80,000 employees. >> for their black friday. their third holiday season is the spring. shoutout to frank blake who was just the greatest in tellers of knowing what gardeners wanted. a great ceo. >> what do you make of all of this gap, everybody raising their holiday forecasts? >> i think it was good. banana republic had a good number. urban. saw a good number for the flagship urban.

i looked at what the chopper was saying, national retail federation. and sales were very lackluster. thanksgiving week sales they thought slid from the federation, 50.4 billion to 50.9 billion. i'm officially retiring that period, black friday and thursday as the period we should be looking at because it was a false tale. one after another in retail really with the exception of tiffany just had eye a great holiday season. >> aeropostale, they're back. >> losing less money at least. >> yeah i was looking for 18 to 23 cents. they're going to lose 1 to 6 cents. but there's a pulse and i think that matters. urban outfitters, geez is it going to be a great growth stock again? i don't know. >> l.b. -- >> macy's didn't get too excited about that. i thought that was wrong. l.b. the investors, radio shack

is not good. but that was foreign, it doesn't benefit, decker's wasn't that good. but if the stuff wasn't more expensive, and it's inexpensive, i think all the big national discounters. >> what i want to watch here is dillard's. i think dillards had a great holiday. >> why? >> they just have the right merchandise. the buyers. you have seen the stock? i think we talked about it. it's been amazing. >> it's been a high performer, yeah. >> heavy texas presence. makes you wonder if texas can hold up. >> i keep looking at numbers for texas expecting bad. it has not hit yet. we all know that the layoffs are just kind of beginning now. there's a delayed reaction to all of this. so far, texas has not been a real problem. >> david mentioned the ten-year back at 2 for the first time in a month. we talked about the banks

rallying on that move, now deutsche bank up to citi with a buy. >> i think corvat is doing a great job. and there was a cue that came out, saying you've got to update your queue. i think it's done a good job. >> we should mention by the way, the latest reports are there may be criminal charges as a result of the currency manipulation scandal, if you will. >> there's been a lot of commodity and currency manipulation that really did impact a lot of what we saw. not just the -- >> u.s. banks included there as well. >> well. >> we do go through the series of scandals whether it will be live or currency or mortgages. you do tend to wonder a bit, in

terms of having confidence that broadly speaking these management teams are capable of keeping it all on the up and up. >> there was a lot that was rigged in that respect, right? there was a lot that was rigged. i think bankers are never going to get the trust again. but obviously, if you bash the banks in washington, it's pretty good for your ratings. >> it is. >> it's a terrible thing to realize that maybe commodities were rigged oil might have been rigged and gas was rigged. you start to think, okay what wasn't rigged. when you're in that club. when you're absolutely in that club of traders that speak. i remember in the 1990s, when we saw traders manipulating payne whiffle got nailed. there's tapes guys. >> at this point, they appear to be looking at their messages and things as a result of the trading on the platforms that

some of the banks traded. >> how could they be so stupid? >> over and over again they got nailed. >> because there's a level of entitlement at that part of the business where i think they feel that the government's a bunch of idiots. i remember when -- well i don't really remember i'm like old enough, i was at harvard law. and top ten people went in to be prosecutors. like they were trying to get the southern district. i remember giuliani rejected me a couple of bs. guys rigging the markets do you understand that those guys pay for free and how hard it is to defeat an enemy who doesn't play for money? holy cow. i mean, that guy is the most dangerous guy on earth. he's not nothing to lose. he like plays for free and you want to take him on. he's not motivated by money? holy cow, that's a dangerous point. >> really good point, jim. nasdaq's doing pretty well.

apple's back up of 120. story in "usa today" starting next week you can use apple pay on jetblue to buy food and drinks. >> i say geez you have a pillow. you sleep miserable in this plane. you forgot how much people -- spirit air on tonight where they charge you for walking down the gang plank and charge you for saying hello. a lot of things they charge you for. you needed that because they don't take cash. jetblue doesn't take cash. >> and dealing with those credit card it's in aisle always a pain. apparently this is the first airline to do this. you can upgrade using apple pay. eventually when the watch comes out, you'll be able to use your watch. >> i'm a big believer in this stuff. i would love the wand. here david, here's some money. >> i'd like that too. by the way, there's a way to do that also and it's called taking out that giant wallet of yours and just giving me money.

>> no this is so much more efficient. >> it is actually -- >> it's like a rubik's cube. >> a costanza wallet. and "sports illustrated" i'm worried, it's 10:45 this morning, we're talking to hannah davis. no money in your wallet and you see her on the street? what are you going to do how are you going to buy her a drink? >> i don't know. >> does he like the mature men? >> she likedoes she like the 60s -- >> i don't know. >> what is the product i bought? i saw it and bought it. >> downloaded a video game. >> smoking game. finally, jim, let's revisit

coke 3.3% is pretty impressive on. >> going back to the editor in chief who covered coca-cola, all kind of reminding me jim, the stock has done nothing. you know this is a welcome respite from doing nothing. >> some arguing pricing for this quarter. trying to get people off of that metric. >> well yeah people just don't -- they just don't drink it like they used to. you go to my cardiologist, is not to be too personal on this personal day. i don't think he even wants you as a patient if you drink diet drinks. they're so toxic. the new generation has said there's a lot of chemicals in that stuff. i know you probably think it's just water. >> i'm not a soft drink drinker. your doctor like the activist. to know you can stay alive --

>> my dr. ben lewis, like when you go to him, you're incredible a conscious of everything you've done in your life. it's like i had an egg. an egg in a german study, eggs are okay. olive oil. >> now that you're 60, we're going to talk about doctors, is that what's going happen here? >> i see a doctor away. there's a new study and your blood pressure is okay at 88. there's a new study every day. >> eggs are good for you. >> but he's all about the wearable. if you get the holy grail and your blood pressure spikes and you're on and he gets the call he lectures the heck out of you about why you're not taking more avapro. >> a triple digit gain on the dow. hey, bob. >> financials lead energy lags. s&p futures. trading before the open.

7:00 a.m., all of a sudden boom futures move up 10 points. there were reports out the e.u. commission might offer a six-month extension on the current bailout program there were reports in the greek newspapers overnight. the greeks will be presenting a plan for a bridge program. call it an extension, a bridge program, tweak it whatever you want. the idea here is we're moving towards some kind of potential deal for the next sick months coming ahead of that meeting tomorrow with the finance. and that's what's moving thing. greece is nicely higher. take a look at europe italy and spain on the upside too, almost 2% in spain. meantime, bond yields are moving up. you mentioned the ten-year over 2%. we've been up i think this is the fourth day in a row. and yields good news for the banks. you mentioned citigroup moving as well, deutsch bank upgraded to the buy.

citigroup bottomed several weeks ago, it bottomed after the earnings seasons for the major banks. a fairly routine occurrence. teen retailers, i think everybody was surprised by aeropostale and urban outfitters reporting sales better than expected. now the whole group, including american eagle and abercrombie will do better. guidance still a loss and better than expected for aeropostale. just remember they've had losses, quarter for quarter, for a long time. any deceleration for the losses good news. starwood had interesting comments. good news revenue, terrific up 7%. wyndham had a beat. they raised a dividend. their red card was 8.6%. of course, this is the key metrics. you can see them up nicely. however, if you're a consumer and looking for a cheap hotel room in 2015 forget about it.

did you see what starwood said about hotel rates. the u.s. economy looks set to continue its growth and in the u.s. hotel business look for rising rates for some time to come. don't look for any cheap hotel rooms anytime soon from them. dean foods has a problem. it's not just their guidance. it's milk. this is the biggest seller of milk in the united states. they came out and talked about the record high commodity prices. they have been raising prices last year. and buried in their comment is the concern because of the high prices they may be see something competition out there. but the retailers that they sell too may in fact be going out there and talking about private labeled milk deals that would reduce their share, essentially. now, they have not given any numbers about this. all they have said they're only providing guidance for the current quarter. they're not providing full-year guidance anymore. that was sort of the red flag out there concerning people about increased competition with them. right now, the dow up 92 points.

guys back to you. bob, thank you. keeping an eye on the ten-year back above 2. rick is he cme. hi, rick. >> it's been creeping and traders have been well aware of the strange behavior and trade of late. but it isn't just the notion as bob pointed out four days of higher yields. it isn't just the notion that we didn't have a good employment report because that was friday. where do we settle earlier in the week, under 170. so there is more going on here. and traders of cognizant of it. look at the year to date and basically up 2 to 1. a year to date we're seeing closer to 217. keep this in mind whether last year or this year the bond markets were never in the red. last year they opened up at 3:03. straight down. never in the red, this year 217. never in the red. this is very significant movement. you see it on the year to date

chart. and the two-year creeping higher than 98 but not nearly as much. if you look at the difference that separates them 10 versus bund spread. they've been looking at that a ten bases point bonus. the bund's creeping higher. they have a weight on them to extend it and trying to handicap that. if you look at the yield we can also garner information. look at a year to date of 10s minus 2s. 2 is anticipated in a large way with upyields. so there you see a notion of stevening in with the fed's job report. if you take that two-year out, you look at 5s, 10s and 30s, you get a different picture. if you look at the currencies today it's a dollar yen day but it's getting closer on that 120

level. always psychologically significant. all the congestion is below there. look at a year to date it jumps out to you. carl back to you. >> rick santelli in chicago. thanks. when we come back the ceo of reynolds american the home of camel's cigarettes. later, she's on the cover of "sports illustrated" swimsuit issue. we'll talk with hannah davis right here at the big board with the dow down 82 points.

take a look at the markets here this morning. dow's up some 90 points. s&p subpoena 10 as we're once again positive for the year jim, as the back and forth continue. >> again focus on the united states, and focusing on apple, a full-time high. a very date barometer. >> actually now at an all-time high. sally sims is one of the providers on "squawk on the street" bringing in, jim, yes.

>> oh. >> that is a beautiful cake. your own jersey. >> yeah. >> number 60. >> i love the network and i love fighting with you guys and the team that we have and the evening team. i'm thrilled to be here. everybody that we talk to. >> happy, happy birthday. >> thank you guys. >> i looked at to see who number 60 was, chuck bednarik the man who -- >> remember, the guy from the 1960s -- >> yeah actually cut gifford's career relatively short. >> talked endlessly about bednarik. >> happy to be here. happy to be with you guys. happy to be alive. happy to have a couple of great kids. >> amen baby. when you get to be your age, that's all you can really be thankful about. >> yep, yep.

i'm happy, yes. i'll say it. >> and it's going to be a big year. >> that's right. the dow's up 94. don't go away.

know that chasing performance can mean lower returns and fewer choices in retirement. know that proper allocation could help increase returns so you can enjoy that second home sooner. know the right financial planning can help you save for college and retirement. know where you stand with pnc total insight. a new investing and banking experience with personalized guidance and online tools. visit a branch, call or go online today.

time for cramer and trading. >> i like a fine merlot. the ceo for cvs, that stock is a buy. piper this morning comes out and says, don't take the profits yet starbucks, it goes higher. i thought that was interesting. man that stock has a good run. that's harold schultz. >> both of those are intriguing torr to me. pharma concept cvs up 5.5. >> they gave up tobacco which i think say great thing. >> you mentioned starwood earlier. and wyndham, people are using that as a sign that maybe the strong dollar is not hurting international travel to the states as people thought. >> bob iger happy birthday, bob iger, said the same thing with disney theme parks.

and visa said be careful with travel. so far visa has not borne out being the top. >> tiffany on the flip side of that. >> it's been on the border. i take disney and the numbers very very strong. i think it's good. spirit air. save. let's hear if that's a cheap way to go. it's been a fantastic stock. applebee's richard pops more about general health. and it's a data point, the earnings are data point versus the approvals. i think the best approvals since 2008. >> oil, this call that oil needs to go to 20 before it's said and done? >> i don't get the sequel to that. we're already seeing there can be a bottom put in the low 40s. today, occidental is the most

leader to oil in the majors. it fits that pattern you that won't want to be much lower. the discussions and negotiations continue between royal dutch and the unions over this labor contract dispute going into its ninth day. >> is it not amazing that we have labor contract disputes west. no one cares. the old east would be like i want to sell the stocks. no one seems to care. >> they don't care until they do. suddenly we'll be discussing it. >> that's absolutely right. it's like the long-term rates in italy. suddenly, it's like boom. but, yes, guys thank you for the birthday wishes. quite exciting. >> it's always a good day. your birthday is i think, one of the most fun to celebrate out of all the birthdays. you obviously get a kick out of it as we do. this is a big one. >> i do get a kick out of it. i wish my late mom or dad were

here. my dad would have called me right after the show. he would have said they really like you. pop, they're my friends. >> we do like you. we'll see you tonight on "mad money" 6:00 p.m. eastern. goldman's equity strategist david coston sees more upside to stocks. plus the model hannah davis gracing the cover of this year's "sports illustrated" swimsuit edition. she'll be here post-9:00. you just got a big bump in miles. so this is a great opportunity for an upgrade. sound good? great. because you're not you you're a whole airline... and it's not a ticket you're upgrading it's your entire operations, from domestic to international... which means you need help from a whole team of advisors. from workforce strategies to tech solutions

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♪ good tuesday morning. welcome back to "squawk on the street." i'm carl quintella with sara eisen, david faber here at the new york stock exchange. simon hobbs more from him. he'll be speaking to the ceo of wyndham worldwide. make sure you stay tuned for that. dow's off the high as we opened with a quick triple-digit gain. a lot of all-time highs regarding the consumer apple, starbucks, as well as hasbro as well. and coke look at that stock.

the leading dow component this morning, up almost 4%. >> yep, sharply higher. investors' expectations were quite low. and the company did manage to beat on the top and both tom line. we did speak with the ceo of coke, we'll have more of that including the impact of the prices. she said coke spending. let's get to the road map, goldman sachs chief david kostin. and the ceo of reynolds american will be joining us for an exclusive interview find out about the massive deal with lora lie and how they're affecting the e-cigarettes. >> hey, rick. >> hey, bob. this is a lot like income spending numbers. two different directions consumer read on invent up half

a 10 what we're looking for. sales down four 10s. this is a bit larger. once again, how much of last quarter of 2014 was inventory issues that gave us some strong gdps that gave away one moderate gdp, of course. this is a december number. all of this will refigure in. in a few minutes we're going to get december jolts and we'll come back for that. at this point, it changed a bit below 2%. but of course we've opened the door to 2%. it's just a question about where it settles at this point. carl back to you. s&p currently 2054 on those. not far from goldman's target of 2400. joining us, the chief strategist goldman sachs. good so-to-to see you. >> it's interesting

opportunities from rotation from inside the market but within the market rising with the growth, 2100 at the end of this year. >> your private forecast included some period of chop right, where we might take a dip down. is that still valid? >> well we had a kwags where there was a hiatus where companies are not buying back stock. a couple weeks before earnings season. and we're now just through earning, season. that is open a positive tailwind from the trading perspective. that's seen as the number one source of demand for shares is corporate buybacks by a pretty wide margin. so that's a key technical or key anomaly perspective to think about. >> right. now, we've got some very big companies raising a lot of money in the bond market. >> rates are extraordinary low, historically speaking. >> that is the one area from violation perspective that would suggest that the market could trade higher. all the other metrics.

enter prized to the metric of choice in the private equity world. they've been reluctant to make changes with the oil prices. the ratio suggest what is the market is a pretty high valuation level. and some interesting dynamics inside of the market have been the rotation for growth. and growth stocks have done pretty well in the first part of this year. and the history would suggest that is likely to fade. and you want to be more value-oriented. and the way to think about that the way i think about that is when the economic data is mixed, growth becomes a scarcer commodity. and people look for growth. but the growth stocks do. is this less than 1,000 value. we did some other metrics. when the economic data gets better is when you want to own value. and at this juncture we're now seeing a very strong employment report on friday which suggests some of the data points might be moving in a stronger direction.

the goldman sachs view is that the u.s. economy will grow at a 3% rate this year. that would be more consistent with value oriented stocks doing better. >> so david, what actually works now we're going to talk about cvs in a minute. they've beaten out the consumer pharmaceutical level on the top line. where do you go into this environment? >> you can go into a variety of different sectors are we think about value, we look at aig, we look at general motors delta airlines, as an example of companies in the sectors which are value. as we define value as looking at low ebda. and the goldman sachs covering those spots. later than the upside that i have in the forecast a low growth market which is 2100 at the end of this coming year. and that would represent or will represent in the forecast almost 16 times forward multiple

at the end of the 2015. so that's a reasonable healthy valuation. >> well, what about those people who will look at what were many of their favorite stocks that are being pretty quite hard by the foreign exchange move as they come through? because that would seem to many people to be about twin hour ravens. do i believe it's a great franchise, do i sit in there waiting for this to turn around? what would you say to people facing that dilemma at the moment? >> if you're looking at that situation for this year owning stocks with a revenue source that is primarily domestic is a pretty critical component. and the reason for that the u.s. economy growing much more rapidly than there are in both europe and japan as examples. and in the fourth year, the company selling into the end markets your volumes are greater. of course on a translation perspective, exporting and transferring earnings would make it better to sell u.s. companies selling domestically. that's an issue.

you talk about franchises. you could suddenly have companies with global franchises many a third of u.s. corporate sales overseas but two-thirds are domestic. so when you think about a portfolio, tilt more towards u.s. companies that are generating sources domestic lick revenue sources, "a." and "b," think about this juncture, given the economic date is likely to get better. that involvement is better than the growth. >> david, given what we've seen in the last few sessions really out of the bond market treasuries, ten-year heading back perhaps above 2%. does this mean this is the end of the utilities that have outperformed all last year? >> it's so much more sensitive in view of the interest rates moving modestly higher is what is forecast. but that would suggest there's more interesting opportunities probably in those sectors. >> consumer staples, expenses? i'm thinking about it because of coca-cola. you're not seeing the kind of growth but certainly they're

defensive. >> well you can find more defensive stocks in different areas. it doesn't have to be unique to -- you know consumer staples certainly defensive. and it would be more interested in my sper detective tiff than value technology. >> david, it's good seeing you. >> all right. >> david kostin. breaking news here. >> hi carl well the white house has just put out a statement from the president confirming the death of the young humanitarian aid worker kayla mueller. she was just 25 years old captured back in 2013 in syria. isis, the group in syria, put out a notice last week said that they had killed her. now, the president confirming that she has died. saying ging kayla represents what is best for america and the values

we have strived for around the world. isil as the white house calls the group, isil is a hateful abhorrent group and in contrast to the people like kayla. >> thank you so much. heartbreaking news. let's switch gears now. we've got new data coming out on jobs just moments ago, rick santelli in chicago with more on that rick. >> jolts, jobbings and labor turnover. this series started around the turn of the century, around 2000. and this is the best level since june of '02. 4.28. and if you look it's virtually unchanged. separations, 4.9, virtually unchanged. if you looks at growths, 2.7 million, that's the one people like to pay attention to if you have enough courage to pit, most

likely you have knowledge to get another job. we want to pay attention. overall, not a bad number what's surprising there's very little notice of the figured income markets. rates really haven't moved much on it. remember, last friday with a better than expected number it helped to put more selling to what was already a light selling market. back to you. >> thank you very much rick. for that breaking data. let's get the first reaction from the dablabor department. joining us here is labor secretary thomas perez. good morning to you. you must be happy to see that earnings number go above 5 million. what is driving it? does that give you a good sense of economic confidence from employers that they're opening new jobs? >> absolutely. this is another indicator on the confident economy. 5 million job openings that's the second high nest history of the series. you look at the number of people who are voluntarily leaving their job.

you don't leave your job unless you have confidence you can get a better job. that's 2.7 million in the depths of recession it was something like 1.5 million people because folks were far more scared to leave. in depths of the recession there were almost seven job seekers for every job. now we're down to 1.7. no everything's moving in the right direction. you layer this on top of jobs numbers on top of gas prices on top of auto sales, and that all equals a confident economy where the fundamentals are very, very strong. zbl the one question i have with all of these strong market data why aren't we seeing stronger growth? if more people are quitting their job, why aren't we seeing higher pay going along with that? i know we're starting to see it but not where it needs to be. >> well actually that's an interesting question. if you look at the jobs created

in last eight years. 8.5%. less than 10% have been low-wage jobs. you contrast that eye were the beginning of the recovery where the vast majority of jobs created as virtually every recovery in the recession lower-wage jobs. so actually over the last two years, we've not only seen increases in the rate of job growth, but we're also seeing qualitative increases in the types of jobs. and that is yet another sign of an economy that's moving in the right direction. >> mr. secretary, we're very focused on the semiannual testimony from the head of the federal reserve janet yellen is about to give in a couple of weeks. in that testimony, presumably, on the basis of this data she's likely to be fairly upbeat and therefore hawkish on the prospects of interest rates rises over the next few months. i don't know if you're able to comment on what the federal reserve does but if they do start hiking rates what do your

models show will happen to employment? >> well, again, you took the wording out of my mouth. i leave fed policy to the fed. and what we're doing here is our level best to make sure that we continue the momentum what we see in today's numbers in last month's numbers. and frankly, in last year's numbers. everything's moving in the right direction. what we have to make sure we do and the unfinished business of this recovery is to make sure that we have shared prosperity. we want the rising tide to lift elbows. we want to make sure that the long-term unemployed, the rate is coming down but we still have work to do there. so that's what we're focused on is making sure we continue to create good jobs. >> you adequately -- do you think you're adequately focusing on the supply side of the economy? because oftentimes certainly, if luke at when the president last spoke in the state of the union, it really was more wealth transfers from the rich as you

might put it to the middle class. trying to compensate for the fact they're not doing so well in the middle economy rather than enabling them through the supply sites to do bet and become more wealthy in the market. >> well actually middle class economics, the linchpin of sustaining the middle class is making sure folks have the skills to compete. the president's proposal to make community college free is a recognition of the fact that just as high school was made free in the beginning of the 20th century, in the beginning of the 21st century, we need to make sure that people have that opportunity to upskill so they can indeed get the middle class jobs of today and tomorrow. >> mr. secretary, no doubt, things are as you said going in the right direction. one area of concern is certainly those states where energy has been a big part of the job creation. what are you seeing or expecting giving that fall on the price of gasoline. and the potential result of lack or cutting of jobs by many of these companies?

>> well we certainly monitor that situation very very closely in states like north dakota louisiana and elsewhere. at the same time it's important to know that you know the average consumer is getting an effective raise somewhere between 600 and $900 depending on what study you look at. that's had money in their pocket. and what drives gdp growth in large measure is spending. and when people have more money in their pockets because the price of gas is cheaper, they spend it. and that spurs growth in other industries. so we're looking at the totality of circumstances. and i know for the folks that i talked to they welcome the notion that they're paying $2 or $2.15 for a gallon of gas. and they're paying 3 and $4 a year ago. >> finally, mr. secretary, the study out today about manufacturing auto matice inging automation

and the notion that robots can go from 10% to 25% automation in the near 2025. high-paying jobs. is that why we're not seeing some of this wage pressure develop? >> well, again, at the depth of the recession we had roughly seven job seekers for every job opening now we're down to 1.7. there's still slack in the economy. and as the labor markets continue to tighten, we're going to see more upward pressure on wages. that's one of the best things we can do to help move wages forward. we also need to make sure that we train people for those advanced manufacturing jobs of today and tomorrow. the 20,000-person bethlehem steel plant which was 20 minutes from where i grew up in buffalo, new york those aren't the types of jobs that are being created today. it's smaller numbers. but higher skill level is required. and we need to make sure we scale those jobs up so we can indeed help ensure a middle class existence for everybody.

>> thank you, mr. secretary, for joining us on those breaking jobs numbers openings. again, highest labor since 2002. that is labor secretary of the united states, thomas perez. ic whiching the smoking hakt.e inging habit. we'll find out with that stock today. the dow is up. ted. visit legalzoom today for the legal help you need to start and run your business. legalzoom. legal help is here.

♪

shares of cvs climbing, cvas health climbing. before it ditched tobacco sales reporting revenues of $37 billion in the quarter. that's $1 billion more than the street expected. meredith adler is the food and retail analyst of barclays capital. good morning. >> good morning. >> how important is this top-line beat? 1 billion extra, up 13% on last year, in telling us what's working now for cvs? >> i think we already knew that they had a decent selling season. i think they did say that the impact, the negative impact from eliminating tobacco was less than they'd expected. and they're getting a very good response.

so you know i think in general, people believe that they are outperforming in just about every area. >> were you disappointed by the margins? >> no. we were expecting exactly what we saw. you know you add -- specialty is going very quick lip and specialty is all margin. so that's you know it's just what you have to factor in when you forecast a company. >> so what do you say to people about the stock, is it worth holding? >> yes absolutely. and what i've been saying to people is that they are transforming themselves into a health care company. and there's tremendous opportunity for them to provide value in the health care system. not many companies can redefine their market. even as they gain share in their core markets and i see cvs doing that. they have a wide variety of capability, and access. the elimination of tobacco had

widespread benefit to them. >> gains we just showed 48% over the last year. my question really to revert back to what happens to it now. given that so much of the change management is presumably factored in that stage. >> i think people will continue to recognize the benefits of the combined model. and, you know maybe they benefited towards the end of the year because of a strictly domestic company. >> right. >> and there's a pullback as people start to feel more comfortable or the companies with currency issues get cheaper, the stocks get cheaper. but from a long-term perspective, we really like the stock. >> and where does cvs fit the grid behalf you cover? >> my coverage is actually very broad. >> okay. like the s&p 500 or something? >> not quite that broad, but yes, broad. >> what is your top pick within the related companies win that space is cvs top? how does it compare to the

others? >> i would say it doesn't have as much upside as other stocks do. our top pick for this year was sprout. >> right. >> because we do the whole thing with food companies. >> and next year? >> i'm sorry, that's or '15. >> good to see you meredith thank you for your time. >> my pressure. >> sara. coming up on the show. the cover of the "sports illustrated" swimsuit issue bringing plenty of controversy. is it too risque? the model here is here's. >> announcer: the cnbc realtime snapshot is sponsored by enter agentive brokers. interactive brokers. the professional's gateway to the world's markets.

some breaking news on apple they have sold 875 million swiss franc deal bond.

ten-year yielding 28 basis points. another 20-year bond 75 basis points. it comes a week after they did another 6 billion. stocks an an all-time high just right below it. talk about free money for a long time. >> those yields are incredible. not negative. i know people say you would buy it because perhaps the currency would appreciate. .281. not bad. straight ahead on the show an interview with wyndham worldwide, find out what the ceo sees for the company and the industry for the months ahead. we'll be right back. in my world, wall isn't a street. return on investment isn't the only return i'm looking forward to. for some every dollar is earned with sweat, sacrifice, courage.

which is why usaa is honored to help our members with everything from investing for retirement to saving for college. our commitment to current and former military members and their families is without equal. start investing with as little as fifty dollars. know that chasing performance can mean lower returns and fewer choices in retirement. know that proper allocation could help increase returns so you can enjoy that second home sooner. know the right financial planning can help you save for college and retirement. know where you stand with pnc total insight. a new investing and banking experience with personalized guidance and online tools. visit a branch, call or go online today.

i'm sue herera. here's i cnbc news update. general motors said a former member of the u.s. task force who restructured the company back 2008 wants to join the board. harry wilson wants to company to commit to a buyback program. home depot is hiring 80,000 workers for the spring selling company. it's the company's busiest season. and walt disney and sony

have agreed to share spider-man on the big screen. marvel will co-produce the next solo spider-man movie financed by sony. and what could affluent americans want on a credit card? turns out pretty much what everybody else wants. cash back. on a survey free money was the number one perk. that's the cnbc update. back to you, guys. meanwhile, there's an element of relief for investors worried about how the strong dollar will impact larger companies. one of the first to report wyndham worldwide beat it by 7%. and free cash flow this year to $800 million. joining me now stephen holmes the yeahman and ceo of wyndham worldwide. good morning. >> good morning. >> you've taken the core projection for next year down albeit well within what people would have expected. how badly are you affected by

the strong dollar? >> not terribly affected. for 1% and the earnings share we raised it 2015. there's an impact for all businesses. from our standpoint we want our managers focused on running the business and not focused on what currency is doing. >> you look at that free cash flow, i know it's a guy who likes to attend cash to share holers, $800 billion this year. what is it the national campaign for all the brands do you have many brands? is it the scheme or that the cash is really good? >> it's all good. back when the economy wasn't so good. so really we've got a phenomenal collection of businesses. they have incredible resilience. all the things you named in dynamic pricing. all of those things contribute

to the performance of the business but at the end of the day, every day, our managers have to get up and perform on how to include global business. >> the last sector of the market to recover is the group area. there's a whole point you see a lot of chinese buying hotels. you say, well that's a sign you might be at the top of something. you recently bought dolce which is 5700 properties. they are for groups. properties for big conference facilities for groups. why buy now? isn't that a cycle? >> well, not for us. we're not buying the hard asset. we're buying the brand. and sometimes, the best time to buy a brand is in the bottom. i'm not even saying we're turning. >> i see you at the top of the cycle. >> i don't know that we are. we're seeing great momentums, we're not seeing a slowdown.

we're still feeling good. if you talk to most there's good momentum in the industry. >> for a long time you were one of the stars, performers on the stock market on the s&p. it's not that you've underperformed on the major road but your stock hasn't done as much as i'd imagine you'd like. you're shortly through the sell price performance if you would. and where you think you should be? >> well, the performance has been fantastic. you said we were one of the best performing stocks for a couple years because we started at such a low base. we're still not where we should be that's why we're still a big buyer of our own stock. i think it's a little more complicated in some companies. so it takes people a little more work to understand our business. but at the end of the day, the value is really the result of the incredible resiliency of these businesses. four divisions. three businesses four divisions. >> you're the only ceo to answer

this question stock 86 67 69 what should it be? >> you think i should answer that question? >> where it should be. >> higher. i never give an estimate of where the stock should be. i will tell you at these prices we're a buyer of our own stock. >> do you think it should be substantially higher? >> of course it should be substantially higher. when, that's for the market to know. wee produce the e. the rest of the p.e. comes from that. i don't control that. i can only tell you what we can control. i'll tell you where we're headed with the businesses, what the cash flow is going to look like dividend. >> how much of that $100 million is free cash flow when you return this year? >> well this year we gave back about $650 million in shares. we purchased another $200 million in dividends. we probably gave about 800 million back.

with acquisitions closer to $1 billion that we spent in total. $800 million free cash flowing. we're not looking to be more highly rated so we'll take on more debt as we produce more eeb ba. >> do you think with the shareholders for the 60% of the gain, do you go oh why can't we achieve what they chiefed? >> we did it for four years before they achieved it. we've gone through cycles. no, i think they're doing great. i think most of the companies in our industry are doing well. it's been a good run for the hotel industry. i'm not calling the run over yet because we've seen a lot of growth. >> stephen holmes ceo of wyndham worldwide. sara, back to you. we're going to continue on the earnings beat simon. one company that is actually being squeezed by a stronger dollar coca-cola reporting earnings. actually rising after a slight

beat in sales and profits volumes which everybody looks for in terms of coke sales. up 1% for soda and up 2% for noncarbonated drinks. pricing is a big story. so for the first time in a few years, coke is actually raising prices and that is helping with weaker sales. the cfo kathy waller telling me earlier that good prizing realization is being seen in the u.s. and in europe. so they're selling fewer cokes but they're able to charge more for them. also, the cheap gas prices is something that the cfo is telling me quote, will help business and will factor into the big results. the big picture, it's still a challenging outlook for coca-cola. that's why management including the ceo and qfo muktar kent are

calling this an action to boot product boost productivity. and refranchising some of its bottlers and the strong dollar. this is a company that's hugely affected by what happens internationally. waller said it could continue to be challenging. also said a bigger hit expected down on sales because of the stronger dollar. coke makes most of its money outside of the u.s. the upside is investors weren't upbeat in the quarter. so they managed to get higher prices for the coke sales and increased volume that did come in in line with expectation. >> any comment from her at all on what is going to be continued expectation about their significant positions in both monster as to what their intent may be? >> i asked her if they were doing bigger stakes of course she couldn't comment but said

always looking to grow. coke is taking big investments stakes in them. i do want to mention venezuela, it has been a moving target when it comes to those prices on venezuela. even today, a new exchange rate regime is being announce napdd, and that is hurting companies, p&g. and lots who operate there. up next the ceo of reynolds company. will the ftc approve the deal. that's what everyone wants to know. and the her take on the importance of e-cigarettes. and another special guest. hey, i'm hannah davis. i'll be on "squawk on the street" on cnbc next. we're legalzoom, and over the last 10 years, we've helped millions of people protect their families and run their businesses. we have the right people on-hand to answer your questions backed by a trusted network of attorneys. so visit us today for legal help you can count on.

legalzoom. legal help is here. jack's heart attack didn't come with a warning. today, his doctor has him on a bayer aspirin regimen to help reduce the risk of another one. if you've had a heart attack be sure to talk to your doctor before your begin an aspirin regimen.

at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping.

♪ stocks had a nice gain right out of the gate. then split roughly in half with

the dow up 51 right now. health care is one of the best performer in the s&p. don chu is back at the s&p. >> good morning. stocks utilities, technology telecom and staples all trying to get a piece of the action. but we're seeing strength across a wider array of health-care related groups. so far the best performing stocks in the businesses, pfizer and edwards and humana. very big gains in the health care sector. back to you. >> thanks speaking of earnings movers reynolds american out with earnings coming in line with what analysts are looking for. investors also watching the announced merger. remaining confident that that $25 billion transaction will close in the first half of the year. joining us now for an exclusive

interview to discuss, susan cameron, the ceo of reynolds. live from winston-salem. good morning susan. >> good morning, sara. >> talk to me about results. how much of is being driven by pricing, higher pricing on these cigarettes because overall, they're still in decline in terms of volume and sales, correct? >> sure, sara. reynolds american had a fantastic fourth quarter and a very strong year. as you said we met consensus, we grew our earnings 7.2% and we saw strong market share growth on all of our key focus brands. certainly, cigarette volumes are declining as they have been for decade, we saw a 2% volume decline in the fourth quarter. as we continue to grow our market share in a very competitive environment, we're very pleased with the balance of shared and profit growth. >> it looks like an industry at large, cigarette volume has been increasing 3% to 4%.

you mentioned 2% in the quarter. is 3% to 4% the ballpark of what you're expecting into this year as well or are those losses at all? >> we have seen that in quite a few of the past several years. we saw that in '14. and that's what we're looking at in '15 as well. >> how is the tobacco consumer doing? you would think that cheaper gas prices puts more money in the pockets of cigarette smokers. we talked that with the cfo of coke. >> we really are a domestic company, a domestic business. we don't have fx headwinds. and we are seeing the gas prices the biggest channel is convenience gas. and the convenience gas retailer is talking about seeing a robust sale. and so that is a good influence for our consumers. >> i know there's a lot of questions for you about this massive deal that you're trying

to get done. number two and number three, tobacco company. you expect it to go through in the first half of the year. any more color on how that process is going with the ftc and why you're so confident that it's going to get done? i know a lot of investors aren't. you can see it in the share price. >> i think what i can say, it is not a transparent process but it is proceeding as expected. we continue to be confident that it will close in the first half. of course investors are making their own minds up as they evaluate the environment. and we'll see how that unfolds, assume weg close in the first half of this year. >> are they looking at competition for broadly not just cigarettes, for example, e-cigarettes menthol, cigars is that all factored in? >> well you look at the total tobacco market of course reynolds american was the first

company to go into total tobacco and make the commitment to transform into the tobacco industry. and with the vuze the digital e-cigarette and the number one seller in convenience in the united states. we continue to offer consumers product alternatives. zonic rt gum that's rolling out in 18 stores. that will continue to expand. we continue our commitment to transforming the industry and driving innovation in the category. >> susan, it's david faber, if i can just follow up briefly on the antitrust side of this. you've heard something, it's fair to say from the regulators that would change your opinion of your potential success in putting these two companies together? >> i mean david, as i said it's not a transparent process. and we continue to work with the ftc, as they look at all the facts. and i continue to be confident

we'll close in the first half. >> just one more question on vuze. you mentioned the growth. it has been stunning. i know you rolled it out last year, you say it's number one. are you worried at all about an increasing number of u.s. states going at it alone. regulating the department of health in california just put out a pretty sharp warning about chemicals citing a number of studies listed in the e-cigarettes. this is clearly an issue gaining traction. how much of a headline is that? >> our vuze digital vapor cigarette is the only one in large distribution made here in the united states. so we are very confident of our product and the product differentiation that we have versus some of the important brands. so we will continue to work with the states to look at really you know we've talked before about some of the risks and some of the flavors that we believe

should be related. we work with the states to be sure there's no underage purchasing in vapor. so, i think, you know it is very topical. it's still a relatively small segment. but consumers are trying. and are trying these vamerpor products. and if they have the potential to reduce harm then this is something that the states also need to take account of as we look into the growth of this segment. >> we'll continue obviously to watch that. i know a lot of folks are getting on the regulation bandwagon. susan cameron, thank you. when we come back a lot of controversy swirling around this years "sports illustrated" swimsuit cover. some say the cover is too reveal. when we come back the cover model hannah davis will join us along with the publisher. you don't want to miss that. dow is up 100 points out of germany, too. we'll get to that in a moment.

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"sports illustrated" out this week with its annual swim suite issue, the top selling issue of the year gracing the cover is model hanna davis first

discovered on the caribbean tennis circuit has done ralph lauren to levy's. along with group publisher brendon grip. good to see both of you. >> good morning. >> we had you on last year. every year we ask, how are they going to get more attention for the issue than they did last year and every year you find a way to do it. >> somehow we figure out a way to make it bigger. this year was two platforms through individual as well as consumer facing events. we'll be doing a fan festival both in harold square which one took place yesterday and another one today, and then we shut down broadway in nashville and we will be doing a large consumer fan festival in nashville wednesday and thursday this week. >> fewer ad pages from the 50th anniversary edition last year right? but do you think it will be the best seller? >> you know we -- >> hanna thinks it will be. >> of course it will be. we're proud of the franchise across video, digital, five part series with the travel channel

which is brand new. we continually push the franchise in more mediums and not think of ourselves as a print only. >> it is a risque cover. a lot of people are saying too much of you is showing. they don't want their kids to see that in the grocery aisle. how would you respond to that? >> i think every year "sports illustrated" like you said they try to do something a little different and i've been saying that this is the year of the torso. i think everybody is talking about what you can't see in the picture. that to me is odd. you can't see anything. >> do you know -- >> don't take it so ser youly. >> when on the shoot, taking hundreds of photos. do you know the moment you think you got the cover? did somebody say that's it right there, we got it? >> no no no. that was the last shot of the day. i had been riding horses i was on a farm in tennessee. and normally covers are shot on the beach. so i by no means, thought i was getting the cover. i was quite sweaty in that picture but i had a lot of help

hair and makeup wise to get me ready right before. >> i know hanna told matt lauer the media is making it out to be more naughty than it is. when the line goes this far, what's left in subsequent years? >> we've been doing this for 51 years and for all 51 covers people have various opinions of the cover and we're comfortable with that, okay with that and proud of hanna and the franchise growth overall. >> you can't really pull her bottoms down any more than that can you? >> that's a question for you. i'm not going to answer that question. >> i didn't know it was the year of the torso. i'm way behind here. to come back to the business i can look up timing stock now, forget it's a public company, and they worry or wonder about good old-fashioned print versus digital. give me a sense what you can expect when it comes to revenues from this issue digitally which is the future for your company? >> absolutely. what you've seen this year is a

publicly traded company, time inc this wasn't a "sports illustrated" launch it was a time inc launch. obviously si.com and in addition to kings leon concert streamed live from nashville across all of the sites as well. we didn't view this as a "sports illustrated" only launch. we looked at it as a time inc launch as part of our future. >> you've been doing this for a while and you're not that old, obviously, but how has modeling changed? we talk about the digital world with brendon all the time. does it feel different in your line of work? >> yeah. i think when i came up you didn't share as much and we didn't really have social media wasn't important. so now i think pictures like that you post to instagram and twitter and all that is really important and people want to get to know the model now and now you're able to. >> you've been if "sports illustrated" before, just not on the cover. how does this change the entire equation for your career? what does it allow you to do

that you want to do? >> i think it just -- it gives you incredible resources and opportunities and i'm just meeting a lot of different people right now and kind of figuring out what i want to do. >> do they call you, do you get like an e-mail or how do you find out you got the cover? did somebody -- >> well they actually -- i was filming an on-line segment on si now. >> si.com. >> and the editor came in with the billboard and surprised me right there and then. >> i think i've seen that picture. >> see the video on-line. >> what does derek jeter think of the photo? >> i think everyone is pretty excited right now. >> i was waiting to see how you would deflect that question. >> congratulations. >> thank you. >> so great. always good to see you. >> thank you for having us on. >> appreciate it. >> all right. now let's send it over to jon fortt with a look at what's coming up on "squawk alley." top that jon. >> this is the "squawk alley" tease which is a bit less exciting perhaps than the

"sports illustrated" tease. we've got a lot of great things to talk about. tim cook at the white house talking about cyber security a and next steps there. senator ed markey talking about car hacking and what we need to be careful of now that we know the extent of what can happen and michele phan the youtube star will join us to talk about what's next in social the empire she's building all that coming up on "squawk alley." we choose to carve our own path, in the pursuit of exhilaration. the 306 horsepower lexus gs. experience the next level of performance, and there's no going back. sunday dinners at my house... it's a full day for me, and i love it. but when i started having back pain

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. welcome back to "squawk alley" this morning. joining us this morning kevin o'leary chairman of o'leary funds investor on "shark tank" and jon fortt and kayla tausche where the market had good gains at the open but lost them awfully quickly. we have had comments from the german finance minister that perhaps all this encouraging news over the negotiations between the groek government and the eu not going as swimmingly as we thought. the reason the dow is up only 29 points. in addition to coke earnings and other things. 8:00 a.m. at google headquarters in mountain view, california 11:00 a.m. on wall street, "squawk alley" is live.