running 15 global brands. that's a lot and had execution errors in the past and the stock relatively rocky for three years. a great performing stock but had issues integrating the acquisitions. >> we have to run. >> this could trip them up. >> thank you. >> thank you. >> back tomorrow. time for "squawk on the street." ♪ good thursday morning. i'm carl quintanilla la with jim cramer carl faber at the new york stock exchange. stocks are set for a bounce. greek deal falling apart for now. the so-called cease fire in ukraine. more earnings than we can count. the dow might see the highs for the quarter this morning. and then the 10-year around 2%. retail sales this morning were a disappointment. our road map begins with tesla. an unexpected fourth quarter loss. elon musk the conference call

like none other. down 7% in the premarket. >> cisco going in the opposite direction. john chambers reaction in a moment. >> expedia buying the rival orbitz. both stocks are spiking higher. but first up shares of tesla down sharply after a quarter operating loss of revenues also missed. they say weather, shipping problems affecting deliveryiesdeliveries. tesla ceo elon musk said he's optimistic business will improve in china. >> i have confidence that by the end of the year we'll be in really good shape in china. i'm pretty optimistic about it. i don't think there's some sort of unique missing fissure there. >> earnings revenue, margin expenses cap x, cash flow and

then your comparison for them today is no good. >> yeah. the 40th anniversary of the "saturday night live" and the conference call needs to be included in the spoof of how we do business on wall street. a favorite line and customers vacationing, only their customers vacationed and no one else's but the financial -- this is funny. our financials are better than they appear. not worse. that's really the key point. then there's a lot of discussion within this. a term of spending staggering amounts of man. he'd like to emphasize that doesn't mean i need to -- todd is the presenter. i have to curse. he needs to bleep me. yes. because, yes, there was cursing on the conference call. i haven't heard that since when they kicked the cfo off in the 1990s. this was without a doubt you have to go maybe you have to go back to sonheim. >> i thought you were going to say follies. >> comedy tonight. let's not have the comedy for a

moment and he said the chinese, the sales people were saying listen, doesn't really work and maybe try it. that was a negative and then let's after the end of the day lost $10,000 a car. cash burned $40 million. losing $4.5 million a day according to my friend anton. why don't they sticker it? it should be stickered it is not a real company. >> really? just going that far now suddenly? >> jim jim -- >> not a real company? come on. >> you must have missed -- >> they need to do this over again. what they said was so not in keeping with what a company has to say. i'm not kidding. >> i think you missed the part musk said the market xap exceeds apple's in 2025. >> david carl -- >> i know "animal house." the name of the college. >> i was willing to go along with the possibility that this could be a huge company. this conference call was a rub con that i have rarely seen crossed in my career of 35 years

of press conreleases and conference calls. this is it. they got to call everybody. >> whoa, whoa, whoa. >> do it all over again today. >> you think -- >> you can't -- >> yes? >> no larry and curly could do a better conference call. shep! shep! if we brought him back he could do a better conference call. >> your comparisons to delorian today -- >> he compared himself to apple. when you compare yourself to apple, i come back at you and compare yourself to another gold winged problem. the delorian. if you say that you're going to be able to make fortunes in 2020 i'll compare you to companies that don't stay in business. if you make claims like that -- >> delorian did make even 32,000 automobiles in a year. >> david david -- >> talking about 55,000 next year. >> i want you to believe because i test drove it. >> a great car. >> so was the delorian.

it was a great car. >> people who argue who had one it was a great car. >> still available. >> you're on board with the downgrade. target 175. on the notion bmw, they're all getting religion on electrics. they have dealers to get a car now. test drive it and buy it and walk off the lot. >> i want to know from alison whether there's a wind mill -- wind turbine from you know katie couric. that ad every 35 seconds. >> yes. >> there is without a doubt. >> it's a good ad. >> i'm with the jpmorgan call. they're -- sometimes in life you listen to a conference call saying, it can't be. it can't be. someone hijacked the call and they put -- this was a hacked call. it was a hacked call. someone is impersonating major executives. >> you are i think being a bit harsher than jpmorgan but the downgrade, you have citing the same themes.

they do say basically highlight the execution risk associated with scaling production to the level they're talking about and then as carl mentioned they come back to competition emerging amongst other automakers in the same area. not to mention lower gasoline prices and many people poo-poo'd. >> you're making a face. >> i had a hard time with that. but everyone comes back to it as a potential reason. i agree with you. you'd think it's short term in nature. it is not necessarily something that will affect a purchase. it's a really good car, though jim. you get in it. you see the people. i mean -- >> there was a way to -- >> beautifully. >> there's a way to do a conference call to give you hope to get back on track. >> what about the batteries? >> the grin. >> the grid yes. morgan stanley analyst. >> 300. >> all -- hey, 300 spartans. tonight this company dinls in hell. i think there's a lot of things

in this company that are good. but that they have decided -- they have been -- they're oblivious to how poorly they're doing now. like the zulily. they were like hey, listen. it's great, great, great. the customers aren't buying. it's great, great, great. this is just like you don't know what you're talking about. the financials are great. we'll spend like crazy and we're really good and rambling and curse a little bit. when i was on jim any kimmel you go to the bar and have a cocktail. >> like the old times. >> loosen up. >> like a dean martin roast. >> yes. >> so to put a wrap on this with send in the clowns perhaps the appropriate song? >> send in the clowns is better than comedy tonight. i was going more of the earlier works. you want to go with the later.

>> that's follies. >> i'll go ahead with it. >> we do not roll along. >> he can beat us both. >> let's move on. on the flip side of tesla, cisco. shares up beat the street with its quartly results. raising the dividend more than 10%. jim spoke with john chambers and the strength in europe. here's how chambers responded. >> jim, i think you know that -- i watch your program here a week or two ago and said you might be all about yourself on europe but i think you called it accurate. i think europe is in a return state. it was minus 4% growth just a short time ago. four or six quarters ago. two quarters ago plus 2. this quarter, plus 7. without russia is plus 9. what we're often is business outcomes. how do you bring the connectivity to countries and businesses and you will see countries in europe move faster

than u.s. digitizing the economy, the business and changing the gdp growth health care job growth and education. we are in the sweet spot of all of those. >> stock opening at a seven-year high. switching up 11? >> yeah. it's really great software story. john, the numbers really kind of extraordinary. southern europe. this guy's having huge double digit gains in southern europe countries. right products, right time. i have not heard john be this strongly let's say dominant since the mid maybe early to mid-'90s. when you had to go to cisco to introduce the internet to the company now to offer a secure digitization strategy with cloud included. you must go to them. there's an article in the paper today of how the white boxes merging with google and facebook to take over the world. you can't. security issues. chambers is back. i urge everyone to listen.

polar opposite of the conference call i ridiculed. it is about how cylinders other than service providers and cable set top boxes are doing well and he says they're not coming back any time soon and you see double digit revenue growth. this company's fabulous. it is back. >> it's back. cable set top boxes are not coming back. >> 20% since october. >> john chambers introduced every -- every single negative he pointed out and then the analysts go over it and he said it's fair game but the fact is that when every single problem that they had in the line items big, switches routers, it's now positive. they're being called in when you want to digitize the internet of all things you got to call cisco in. it's a lot of it security. it wasn't growth like fireeye and fireeye is growing like fireeye. there is, you know the rest of the world is doing better than we are digitizing. and they're calling in cisco.

they're calling them in like they used to like the '90s. i called cisco. i said could you put me on the internet? john chambers arrived. >> let's get all customers get that kind of treatment. interesting news release of costco and amex and unable to come to agreement on their merchant deal. their deal expires in march of 2016. amex saying that the loss will have a negative impact on revenue and eps in '15 and '16 and confident of 12 to 15% eps growth without costco. >> i am -- look. >> amex opened down 3%. >> i have to tell you i think it's overdone because on the conference call they said that this was a possibility. i listened to it. i said if it happens, you know going to be 4% of its u.s. bill business. 2.5% globally. try to put an entirety, wrap it around. i didn't think it was in more

than just, you know a low single digit wouldn't move the stock like this. i think it's overdone. doesn't matter. people are shocked if you're on that. they said this could happen and everyone felt it was just boilerplate he said it. a huge part of the loans are costco. >> really? >> costco no stranger to puttinging up a fight no matter who their counter party is. coke -- yep. >> war against apple. >> apple. >> apple did in the end they solved that problem. >> yes. >> apple is hard to fight. >> hard to fight jim son gal, too. >> he is no longer in. >> i know. >> same cut of the same cloth. you know? just great guys. delivering fabulous numbers and giving special dividends and doing everything that's right. there's a lot to answer for in the sense that i think that going back to the conference call i think what he should have said is if we don't get it done it could be really bad and he said it might not get done and this cfo is kind of really i -- he's exacerbating the problem

because it should have been telegraphed earlier how bad it was. i thought it was minus 2% to 3% doesn't drive the stock down 6% and still saying overreaction and not handled well. >> coming back expedia buying rival travel website orbitz. shares of both companies up sharply. priceline have reason to worry about the deal? we'll talk about that. former treasury secretary larry summers with his take on the recovery and suggestion of the fed coming to hiking interest rates. get a look at the premarket. the dow been around 17,900 one time this year and looks set to do it again today. hey, girl. is it crazy that your

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two travel websites are hooking up. expedia acquiring orbitz for $12 a share, more than $1.3 billion this cash. 24% premium to wednesday's closing price. last week on "squawk alley" we talked to the ceo about the aggressive growth strategy. >> we are investing more aggressively because the market is more aggressive. we think that the competition in the market's going to continue through this year. and we think next year the competition's going to settle down a bit. >> we'll see about that. so much consolidation. they bought travelocity. now this. >> trip adviser, not the same

model, good number last night, these have been two head to head really kind of hurting each other at this point and that's changed now and i think that there's still some that can be bought. home away could be bought. i'd always felt yelp could be bought. they're not as strong on fundamentals. orbitz failed. >> nothing short of a disaster. >> terrible management. >> the sale price is below the ipo price. think i it went public about almost 15 bucks a share when it went public. when was that? july of '07. guess. an lbo way back when. started in 1999 by american airlines and a number of other airlines trying to respond to the growth of expedia and -- right. controversialocity and came along and let's figure out orbitz and launched that in '01. went public. went private. went public. going private. or being bought. >> i love them.

>> some say they're all worried about google jim. do you think that's true? >> they should be. i think they should be. google on that last conference call is funny talking about google glass and how basically like shelving that. if they were to go get involved with the boring rudimentary things, whether it's yelp which i think they're really threatening yelp or what they're doing, they could make a lot of money but it's almost as if it's too prosaic for them. let's put men on mars. >> sure. >> and yet they have to get rid of the musk orientation there because what happened is the world is their oyster developing a tv network and travel. focus on reviews. they can do it. i think that yes, i think it's everything defensively against google and does not take the bait. google has to start getting their hands dirty and coming in to industries like this. they just seem to trick theal go

rhythm like ebay. stop it and go against people. google has to stay more focused. >> you mentioned trip and opens up 14%. a miss on the bottom line and revenue was ahead. pretty good quarter. >> stocks going. it was down badly and people realize, you know what? let's give them the benefit of the doubt. last night a lot of situations where the initial reaction for the stock was wrong. we have been having this for a couple of days now. henry shine and you introduced me to the other day. stock opened down 4.5%. finished up a dollar. first impressions leading to wrong impressions. >> potentially bad quarters i did want to share it now. kellogg lowering to i think 1% to 3%. seen 3% to 4%. that stock is looking down. >> i'm going to cut in here. why don't they go after kellogg or a dupont or a general motors. go after kellogg. i know the answer.

>> oh really? >> what's the answer? >> how do you -- what is a company that is too weak for investors to want to actually go after because the downside is strong? is large. >> exactly. right now about studpid companies for $200? >> a lack of activist presence. >> it's a loser. >> the company that is will require a lot more than just simply saying buy back stocks. >> by the way, north american morning foods down almost 8. >> contrast it with whole foods last night. a thing of beauty and recognize people don't want kellogg. it's tough. you should have bought white wave and it's going to be down and it was an investment year and didn't tell us ahead of time. >> we'll count down to the opening bell. busy morning as you can explainly see. haven't really gotten to greece or ukraine which is also in the news. more from the nyse in a moment.

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♪ it's thursday. you know? the days do go by. >> this one, doing these conference calls in the middle of the night, the whole foods conference call was one to get to. why? because this is the call -- this was the valley where they realized not enough to just offer good food. they need technology instacard,

remodel the stores. they're vanquishing the competition in the category and don't worry about the krogers and tar gets. they offer a fantastic technological experience. they're the largest apple pay customer. >> are they really? >> yes. >> did not know that. >> largest apple pay customer. out of nowhere. the technology leader and starting to rule -- i think they have an infinity program. their national ad program is working. >> cut the price at all? >> reasonably priced. remember, they're showing you why they're now paying more which is that their stuff is sourced responsibly. people like that. if you're in a jam for valentine's day, they have an offer to get to the chocolate and flowers in an hour basically. >> listen. when walter came on you gave him a hard time. i give him credit for willingness to come on with us. >> he's such a gent. i mean we went back and forth. we're all humans.

listen. we'll do better. well, they far exceeded what i thought they could do and it's very early. vanquish fairway and still around. we love to go to fairway and fresh market even sprouts i think is not sprouting like it was. >> i love to go to fairway. i hate going to fairway. but that's why i don't. fireeye. >> yeah. all right. every single one -- it was really fun. the conference call is like every time you read that there's a breach someone says call fireeye! in the conference call it was just like a great it ration of why. once you call them in for forensics, then they get the back end and a software is a service model and people are confused losing money. this is a fabulous quarter for fireeye. i'm critical of them but i recognize they have a superior product. come back and say cisco has the soup to nuts and end to end but fireeye is firefighter in the group and will do well and the stock will go higher. >> i think the ceo on the fast

money five. >> that's great. the numbers to listen. revenue up 168%. that's not easy. third quarter, an increase of 2013. previously -- i mean just ramp here is incredible. >> yeah. well, we know -- every single day dealing with another breach of some kind. >> right. >> this is not a problem that's going to go away. >> no. >> particularly starting to live with the internet of things and one can only imagine what criminals will be able to do. >> cisco is saying you can't use the white boxes and layer on software. you have to have an organized strategy and that's true. all the guys want the government to do more. the government wants private industry to do more. david -- >> it's progress. >> it is so -- the fireeye call is scary. >> all scary. >> very little money being spent to stop it. >> great importance and you're right. >> you taught it. >> let's -- well let's take a break. opening bell on the other side.

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you're watching cnbc's "squawk on the street" live from the financial capital on this thursday. busy one. a lot of earnings. tesla and cisco and whole foods and expedia buying orbitz. there was some concern about the greek deal quote/unquote falling through last night and obviously there's more time. the prime minister will make the case once again to the eu leaders today. see if the cease fire as they call it in ukraine has influence. there's the opening bell.

over at the nasdaq inovilon for the health care industry and celebrating its ipo. the tug of war, jim, is going to be on the dow at least between amex and cisco. >> there's people who really -- the amex thing, there must be someone in there thinking this could not happen. it's overwhelming the buy side obviously. i think when the smoke clears the stock begins to rally again but the fact is that they said this could happen but they didn't indicate on the conference call how big it was and it takes the breath away. i think the stock -- still great american company and same time you know mr. shineault has to say what happened here. he has to say it listen. this is why it broke down. this is why we couldn't agree to the terms because costco is more powerful than i think he

thought. maybe he misjudged the power strug. >> cisco the best dow component and amex the worst. >> john chambers again, i mean i think i encourage everyone to watch the commercial not to be too self serving or listen to the conference call. new cfo a fabulous job, by the way. >> very good call on the turn of sis can. >> on the buyback? >> no. turn of the stock. >> thank you, thank you. i spoke at one of their meets. >> you were not always positive on this company. >> you talk about walter rob and, you know it is not about friends. you wish it were about friends and it's about performance and rob and chambers are two of the great performers of this quarter in terms of delivering and overdelivering. underpromising and overdelivering. they have it together. you don't want to bet against them. put the chips all on whole foods and cisco. >> fred hickey argued that low

rates leading to mal investment in the cloud. the build-out is worst than the internet boom. do you think that's even possible? >> john chambers is sensitive to the period of vanquished nortel and took over that whole service provider business and turned out remember in the year 2000 at the top there was something like 9 out of top 25 companies were internet service provider like global crossing. >> lucent. >> hey. remember that brazilian contract didn't close in time. one of the great fiss a cos. you covered worldcom. i don't kay greeagree xwauz the internet of things is a data center and not overhyped lots of different ipos getting data. has to do with an overwhelming amount of data and need lot of companies to manage it for security of fireeye, whether it's a soup to nuts lucent and

cisco and you have the amount of data produced every second is like ten times ten years ago. >> you talked about of course strong performer so far this quarter. apple amongst them. stock up 14.5%. let's call it year to date. another plus 1% $735 billion market value. carl icahn with a price target of $1.3 trillion market value. i spoke to a couple of people returning from the goldman sachs conference that took place where mr. cook presented a couple of days ago i think it experience and he said you're going to be talking to your watch a lot. >> well i mean -- whole foods with the watch further in terms of adoption of apple pay. i don't think this is elmer gantry. i think it's real because it's 14, maybe gets to 15 times earnings after this run.

>> between the watch and -- >> what does kellogg's tell you? sold to you mr. tony the tiger. i'm shorting both tigers. >> kellogg down 4%. >> i can't short. jim cramer -- i can't even own a stock. i'm not even allowed to own cash. >> all you're allowed to own is homes. homes. >> people say cramer shorted tesla. cramer can't own any stock. >> no no. can own a bar. >> i can own a bar. that's why i own houses. >> you can invite us over to it a lot. >> listen. that casa mugos is playing. >> this will be an all-time high on apple at 126.30 here. as david mentioned, carl has his targets. the natural suspicion for some is costco dumps amex and adopts apple pay. >> never -- amex had their loans, there's a loan business

and apple's not getting in the loan business. the whole food took me away hearing apple was the biggest -- what's it mean? forward group of people shopping at whole foods and i continue to tell you that whole foods is template. they're going to -- >> for apple pay? >> yes. go back over in the book about apple. you know that none of those record companies was even like taking the call initially. and then in the end they begged they begged they were on their hands and knees let us have a little business. >> well, he pantsed them. >> herb albert sold at the top. a genius and a musician. >> those that deal with him think twice given the experience of the record companies did have. >> i think that -- >> but there can be an argument made that everybody will benefit so i'm sure that apple's making that argument. >> i think this thing is revolutionary and happening right now. it's happening right now at apple pay. right now all the retailers are

huddled around. they're in the jammies like please don't come after me apple. they're coming after them. >> a stock that's had a good run, twitter. wow. up 34% so far this year. >> good quarter. >> up again today. >> good quarter. >> twitter. very good quarter. again, his comments at the soldmansold goldman sachs -- >> a religious experience? >> no. i like to say the name of decostala. you never know day-to-day. >> stock goes higher. i like the ceo. stock that is are loier, i tend to be critical. >> a metric at the goldman conference was their goal to have 1 in 20 tweets be supported by an ad. are you -- would you worry about user experience and ad load? >> going over what zuckerberg said in the conference call he said saying listen i think i can make the ads so that they actually up the user game and

then done it. then i'm saying it can happen. i don't think the current management team could maybe they have people in the bowels that do it but it can happen. if zuckerberg said it could, people laughed. stock around 29 when he said it. democratic party in philadelphia. cheesetakes for everybody. >> not brooklyn. okay. >> i do think that it's possible that twitter's ambitions can be executed upon. because it's the personal news service for the world. >> all right. s&p 2077 is the highest it's been all yearlong. bob pisani on the floor. >> we are 13 points away from a historic high on the s&p. 29. the eve of december. 2077 today. now, greece and the euro zone may be in a stalemate. you wouldn't know that looking at europe. look at europe. of course there's this declaration still vague of a cease fire in ukraine and also animating the rest of europe.

all the major in europe up to the upside. look at the european banks. credit suisse doing cost cutting. the ceo said they're moving employees out of switszer land. this is the home base to lower cost locations. ouch. but the stocks are all moving. a terrible month of january. they're all rallying however. move on and talk about here. oil catching a bid. this apa chee. here's an incredible statistic from them. 91 rigs at the end of this month, the end of february, they anticipate 27. this is almost a 75% reduction in the rig count and fracking crews reduced about 50%. some of the emp stocks on the upside. the point is that the u.s. oil business is much more dynamic

than oil exploration and production around the world. they can ramp up and ramp down production much much faster than other places in the world and a lot of people believe that this is going to bring prices in e quiquilibrium than before. positive development of apapche. you see the competitors to the upside. let's move on talk about semiconductors. we are getting a sneak rally there. yesterday, here's the etf. the exchange traded fund that everybody owns. this is a basket of all the big semiconductor stocks. hit historic high yesterday. this is very very good volume. we have had a lot of companies report decent comments and numbers overall. look at the numbers this month. all of the major names are up. this is just prior to the open this morning.

analog micron. all doing very well. basically hitting the numbers or exceeding. take a look at tech today, nvidia with a good day on top of that. jim, when was the last time you saw cisco ramped up with a strong follow through after the earnings report? it was great after yesterday. there's nvidia up and of course apple up intel up 1%. finally on ipos this week a very mixed bag. the big one that did price is inovalon helping managing cost data analysts whatever you call it. priced at $27. prior to that a couple days 21 to 24. so here's going to be a winner. over on the nasdaq. not yet opened yet but there were several others mostly bio tech haven't and didn't price where they were supposed to and call this week a biggest week of

a listening time very very mixed so far. the dow jones industrial average up 38% and 13 points from a historic high on the s&p. that's a closing high hitting that. back to you. >> thanks a lot. we are going to talk to expedia's ceo dara khosrowshahi. hello, rick. >> i guess down should be the big word trading fixed income. the stocks stopped going down and boon yields stopped moving down, adds well. all of that makes for a bit more upside in yield than many expected. look at the intraday chart. we did see that we were up around 205 and all of a sudden a lot of things came together including a little bit after that high yield was traded we had the weaker than expected retail sales. you see we are under 2% year to date after settling at the best levels since the fifth of van and hovering there and definitely the data had an effectment also an affect on

boon yields as i told you. 24-hour chart and what's interesting, year to date chart and keep in mind scaling. yes, they have been in a super tight range since the 22nd ecb meeting but maybe the dynamic of being paid attention is stopped moving down and that is something to contend with. if we look at all the hoopla out there around energy and high yield, and there is validity to that interest, look at a one month of barclays high yield spread chart. boy, it is more under control and obvious by that chart. let's go back to currencies. year to date of the euro versus the dollar, listen once again, this is an arrangement just like boon yields and should be like the differential and the relationship of the currency and the interest rate. so why did the dollar index so well yesterday? one of the reasons, look at year to date dollar-yen chart. yesterday, a settlement over 120. best in the second day of

trading of 2015 and as you look at the dollar index, yesterday we made a fresh new high back to the fall of 2003 but a lot of good trade in the dollar yesterday's already down. we're down over half a cent. only two currencies that aren't doing better against the dollar today are the aussie dollar and the swiss franc. back the you. >> thank you. when we come back we'll talk to the ceo of expedia first on cnbc about the deal to buy orbitz. the dow just about 50 points away from the high. we're back in a moment.

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nba kicks off a very fun weekend in new york. you have to -- who's your basketball -- the sixers? >> they look very good in the last couple of games. they're really exciting to watch. >> a couple of minutes in the first quarter? >> 40 in the -- golden state is unbelievable. they're the most exciting team to watch. they throw the bodies. they play like it's the final four and they're one of the schools from the outside. >> they are strong. the hawks, of course, a big surprise this year playing great team basketball. >> a good friend of mine from goldman guy doing a fantastic job down there. >> the market is helped but oil is not hurting, jim, back above 51. >> we didn't talk enough about the russian deal. it's u.s. centric now. and if you get a cease fire obviously, be able to make it and russia doesn't have to pump the fortunes like they have been doing and a lot of what people react to is pioneer call

yesterday and pioneer said we are cutting our cap x by 50% and still going to increase the amount of oil we produce and that's because the companies are making much more money than people realized even at the levels. the situation with oil going up a little bit, people are talking about 70 the new 90. literally if oil goes -- making more money now because the price of drilling has come down and there's a dynamic in the u.s. making it so the first quarter is a huge first quarter. >> 20% reduction in costs i believe compared with 2014 at pioneer and a wolf camp -- >> fabulous david. it is. 182,000 barrels a day. the replacement is unbelievable. they have a great balance sheet and cutting back anyway. the best chart is about 2015 production and does -- production peaks in q2. okay? still going up. even though they have cut. and then flattens out. what this says is america may not be as bad off as you think.

the well capitalized companies are -- may be what you read is pie pioneer down yesterday and all those companies are doing better today. >> because the costs are coming down. >> dramatically. >> break even coming bay down. >> yes. you know doing this thing of high grading going after the absolutely best properties produce -- have a low break even. sometimes $25, $30. so the ingenuity, the costs coming down $29,000 a day now some cases of $20,000 a day and the prospects of best is leading people to realize the profitability is better than people realized even at $50. >> let me quickly add there's consolidation. i don't know the names but bankers say there's deals afoot. not necessarily large but in the energy complex given the fall in oil prices. no doubt. >> right. the debate is do i buy, go back to a mayor to do well or oxi. do i go to an independent and think it is going the make it

without being capped? or do i go after the $3 stocks and bet they go to 6 before 0? that's the whole -- that's the big blackjack table. >> we'll get stock trading with jim. don't go away. why do we do it? why do we spend every waking moment, thinking about people? why are we so committed to keeping you connected? why combine performance with a conscience? why innovate for a future without accidents? why do any of it? why do all of it? because if it matters to you it's everything to us. the xc60 crossover. from volvo. lease the well-equipped volvo xc60 today. visit your local volvo showroom for details.

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time for cramer and stop trading. >> panera. all right? everyone's freaking out because they think that wow, they guided down the margins. next year could be -- rest of the year is a year of expense. i urge people to go over the progression progression. december was much better.

i don't think that the company should be written off and find six months from now it will be higher. the pain i understand right now. better than expected not worse. people are overreacted. white wave, people did not overreact. it's up almond milk. doing fairly well. into china. i don't n't to sell panera down here and whitewave, what can i say? people believe and it goes higher. didn't prep people enough on the spend year. >> retail sales disappointment yet again, jim. >> i can't find who's disapointing. zulily, yeah. they went to tiffany. they got them right. everybody else is doing pretty well. >> yeah. i meant the macro retail number today. >> the macro is not making sense to me. i'm stuck with the four walls of the companies i deal with and i don't find -- unless walmart is having a huge disappointment which i don't think they are.

it's hard to rational and told you black friday was bad and it turned out okay. >> why would we be breaking out now? 2080 s&p. high of the year. is this about hopes for greece? can't be about a cease fire can it? >> i think greece and russia off the table allows us to focus on the earnings and just happened to be last night in particular was an incredibly strong night. and we have been a little bit day centric and last night's earnings conference call with the exception of the elon musk whatever -- >> makes up for the banks, makes up for some of the housing reports? >> yeah. people like the ten-year. going over 2%. helping the financials. 17% of the market. a great note about the semiconductors. tech is doing better. consolidation of travel. the strong dollar not hurting earnings as much. very interesting. cisco like boeing you have to buy it in dollars and no currency issue. >> trip adviser is a big

beneficiary of the orbitz deal today. >> decent numbers. consolidation. you need a couple of players. it is funny american express could have been this. could have been this. >> what's on mad tonight? >> oh charlie. >> all right. >> terry's my brother. >> don't read the book. very negative. >> a price on wilson. >> charlie -- >> skechers on tonight. that's pete rose should he be in the hall with the shoes or the awards. martin mar it that the hottest stock for two days because of new construction in this country and dominion building a plant to export lickquefyied natural gas. >> see you tonight. >> taking a little nap. a little nap and come back. >> when we come back the ceo of expedia in a moment.

sometimes the present looked bright. sometimes romantic. there were tears in my eyes. and tears in my eyes. and so many little things that we learned were really the biggest things. through it all, we saved and had a retirement plan. and someone who listened and helped us along the way. because we always knew that someday the future would be the present. every someday needs a plan. talk with us about your retirement today.

welcome back. i'm carl quintanilla la with

sara sara eisen. simon hobbs, david faber. stocks at the highest level of 2015. s&p 2081 with crude oil making a bounce back above 50. a lot of news regarding greece ukraine and cisco not hurting. >> let's get to the road map this morning. starting with that deal. expedia buying orbitz object $1.3 billion in cash. the ceo joining us live in a few minutes. >> shares of tesla down sharply in a good market this morning after disappointing fourth quarter figures. musk says he is optimistic. what do you do now with the stock? >> former treasury secretary larry summers said now is not the time to raise interest rates. >> let's first get to rick santelli. hey, rick? >> hi yes. december business inventory is important for calculations adjusting fourth quarter gdp

up . 1%. we were looking for more. what's fascinating is we have had a couple of up .1. last time was in august but you have to go back to may of 2013 to find a lower month over month increase and the month i'm referencing was zero. you have to go all the way back to march of '13 to see a minus and this is definitely on the low side of the last you know in the top three lowest numbers over the last year and a half or so. so we definitely want to pay attention to the inventories because it does seem as though there was a surge mid year for the good gdp bust-out numbers. back to you. >> thank you. shares in orbitz rocketed this morning on news that the ceo found a buyer for the online operator. total $1.6 billion if you add in

the debt. expedia already has 13 major brands to which the ceo dara khosrowshahi will add the orbitz brand and the cheap tickets, ebookers and hotel club. dara joins us now first on cnbc. good morning. >> good morning. thank you for having me. >> why do you need so many brands? what have you got now, 17? >> we don't 17 yet. obviously. but listen. this is the travel market on a global basis. it's a $1.3 trillion business. we've done just over $50 billion in bookings. we're less than 5 prs% of the total entry and plenty of growth ahead of us an consumers love brands and comparison shopping one way to grow effective way to grow is add to the brand stable. >> people have a lot of responsible for orbitz in the industry. that's quite clear and bought orbitz back from the brink

investing heavily in technology and a lot of back office deals with amex running the back office for amex private label businesses and people felt that longer term it couldn't survive. certainly didn't have the buying power you and priceline have. fair comment? >> i think fair comments and i'd also note that barney earned his early stretch in the period of expedia and he was able to take those skills to orbitz and i think that team has done a lot with the smaller scale that they had. and we think that adding their capabilities to our scale is going to be just dynamite and pretty excited about it. >> i think just to emphasize that buoyant, this is about allowing the expedia brands to have access but forgive me. allowing the orbitz brands to have access to the expedia inventory. and the power to bid in realtime for deals essentially. >> absolutely. we've got one of the broadest global inventories out there.

and we think that the compliment of that inventory to the oeshtz loyalty program, we think that's a terrific combination. >> the first question on the conference call is will the regulator get involved. why are you so sure that they won't? because there are basically two players, you and priceline. hiding behind a stable of brands in each case. >> well i think that to the way that we see the business is there are many more than two players. you know every single supplier out there has very strong supplier direct operations millions and millions of people are going directly to american airlines or going to hilton directly. google is in the game. the meta players are in the game. we compete in a much larger segment in general. and there's lots and lots of competition for that top audience. and we think that orbitz brands add to the capabilities there

but this is a big industry with many more than just two competitors and why we think the regulators ultimately allow the deal to happen. >> you mentioned google on the list as if they were just another player and they have a lot of artillery at the disposal. we had a discussion about how much consolidation is driven by fears of what they can and will do. how does that fit in with your view? >> well listen. the google is a great partner of ours and constantly innovating and i think all technology companies on the internet then have to be on their front foot and moving very very fast or else they're left behind and i think expanding our brand presence allows us to be highly competitive in that segment and continue to grow the way that we have historically. >> you know peter teal in the recent book, dara says people in monopolistic industries argue they're heavily fragmented and that's the deal and what yaw say

and the reality is i don't know our advertising budget. priceline is the biggest on google and they won't upset the apple cart for you guys are they? there's a temptation here to overemphasize the potential role, not the present role but the potential role that google could play. >> listen. google is in the travel business for a long period of time. right? first in pure advertising and then hotel price ads and we've been able to adjust and in the end google is an advertising platform that hotels can plug into directly airlines plug into directly and then sbeer immediate yairs such as ourselves plug into and as google adjusts the model, so do we. we don't think it's different going forward but highly competitive. that's not changing. >> i can almost guarantee that darren houston in priceline am amsterdam is watching this

interview now. of the two of you which will win? >> i think we can both win. this is a big, big industry. 1.3 trillion. adding our bookings to priceline, it's less than 15% of the total global travel buy. that is huge industry and still highly fragmented and i think you are seeing some of the consolidation start and i don't think it's finished. >> priceline paid $2.6 billion for open table. any chance of you moving into a broader space of online bookings like restaurants as the consolidation in the industry continues? >> you know listen. never say never. we like the base. i think in general, if you look at priceline, they don't have as much of a concentration. we like the air business because you get tons of data on what customer intent is. and we think that you know we're building a global full service online travel agency and then a number of other products as well.

hotels.com et cetera. we have an attractions business that's growing nicely. i don't think we're going to get in the restaurants business and certainly in market attractions is an area we're growing organically and seeing other targets out there we'll take a look asame time, dara most people watching the television now have no idea going online the brands that are coming up are broadly owned by the same people. do you think there's a possibility that people will wake up to that and will question the come pettive nature and the realtime pricing they're getting and competitive in a kind of practical sense? >> well the way that we practically run our brands is the brands are run independently by presidents who have their own technology teams with their own strategies. so and we do it in order for the brands to look different feel different to the customer have different loyalty programs et cetera. i do think that you would be

right starting to consolidate the brands under one embrel'em umbrella and gm. >> come on. you can see what all of those brands and competitors are doing in realtime. your technicians sit there and watch who's bidding and pricing. almost like a perfect realtime alogopoly, suspectisn't it? >> we're not there yet. at this point, the rewards that we see are each brand acting independently, innovating. we share datament we share best practices and there isn't some kind of global realtime dashboard telling me what each person is doing. the way we run the brands is we have to let them be innovative. we have to let them be independent. consolidation usually slows you down. and we're not in the business of being slow. >> it's always good sparing the time to talk to us dara.

thank you for your time. dara khosrowshahi the ceo of expedia. shares of tesla moving significantly lower this morning after a major earnings miss. struggling with sales in china and production and shipping issues. that did not seem to deflate musk's optimism on the conference call. take a listen. >> you take this year's revenue, you know around $6 billion, thereabouts, and if we're able to maintain a growth rate for ten years, and achieve a 10% profitability number and a 20 pe our max cap the same of apple today. >> okay. should investors be as optimistic. ? let's put aside the metrics to talk about eventually. this tone that he took last night, we are going to be as big as apple, i have secret weapons. gap doesn't count.

did they make a mistake? >> well it seems like elon musk pushed the insane button on the spending ambitions. i kind of cringed whenever i hear these comparisons to apple, especially a share price perspective. we want the company to focus on hiring the best people disrupting the auto industry and making the customers really happy so no i don't think it's a death mistake. i just kind of cringed a bit. the real story here guys is this company wants to grow massively at all costs and short term profit maximumization is not a priority. >> because of that you write this morning the key question with're left with is whether investor appetite can keep up with tesla's growth journey and expectations in the capital markets. so you can't blame someone for losing patience here. >> oh yeah. no. we think the stock price reaction today makes a lot of sense. a lot of people on page 1 or

otherwise are asking questions, what am i involved in here? on one level, i think some of the messages of the conference call was you have a mentality of cash burned is good. it is good we're burning cash because we're putting the money, investing it into a business to make ridiculous returns and cash flow and generating cash so early, that would be bad because we'd be making 0.1% in a savings account. that's a big digestion for investors and it's kind of a return to what we call investment fundamentalism or belief based investing where you're in or you are out. and if we were just normal auto analysts tracking sar and looking at next month sales we would be very nervous right now. we see a $10 billion adjustable market globally and no one better positioned than these guys. the t-shirt says keep calm buy tesla. >> including some of the problems in china? why is that such a stumble for

them? >> i think there's another story going on in china, a delicate one. we believe there could be some let's say government or regulatory impediments there that we don't think that the company wants to be that open with on the conference call less they start seeing tesla set on fire by the communist party in china so we think there's a bit of a story they're working through. tesla wants to own everything. the ip the dealers, the manufacturing and, see, we see it as a conflict with the way they want to do business and the way chinese authorities if you will want them to do business. that could last for quite a while. >> you know, adam i have heard you use pushing the insane button and then i heard you use the words fundamentalism both of which to me highlight the enormous risk in this security. would you agree? >> yeah. >> there's reward with risk but you seem to be painting a very risky picture. >> yeah no question. we have valued the company at

$280 target based on a protobmw making of fine automobiles making people like jim cramer really happy. there's a proof of concept of that and that justifies we think 280. we have optionality to them being a 10 or 20 bagger and an analogies to apple and the premium to the call option is days like today and wondering what the hell am i owning? again, when we see an industry we smell blood. the auto industry as it stands now is so ripe for disruption. not just batteries. we're quite excited to see the stock with a one handle and we're all in. >> okay. adam talking about an insane button. thanks. good to see you. coming up former treasury secretary larry summers joins us live. find out why he thinks now is not the time for the fed to raise rates.

s&p 2082. close to session highs. dow up 71 points on good earnings of cisco last night offset partly by this deal at american express. their deal with costco apparently ending next year and taking a ding out of earnings and revenue. when we come back larry summers weighs in on the fed and rates in a moment. we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action. we've made our passions our life's

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for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to cialis.com now is not the time for the federal reserve raising interest rates, that's the latest op-ed of larry summers and joining us is secretary larry summers, charles w. eliot university professor at harvard university.

good to see you again. >> glad to be with your. >> is your concern about raising interest rates too prematurely sounds like mainly inflation even with the expected impact of low oil prices? you're still worried we are not seeing inflation in this economy? >> there's no reason to slow down the economy except to serve a purpose. wages haven't been rising. in way that is have kept up with prices for a long time. middle class families are still struggling and the fed is still well short of its inflation target. indeed, if you look at core inflation and take out housing, there's no price increases at all. so we've got room. 'eve got to watch the inflation data very carefully. the fed said it's data dependent. that's exactly right. but no reason to tighten until we see the whites of inflation's eyes. i don't know when that moment will come. i'm not even sure it won't come soon. the criteria should be no hitting the brakes until we see

a barrier where we're worried of crashing into and with core nonhousing inflation at zero, we're some distance from that. >> would it really be that damaging? i'm just -- it sounds like the federal reserve based on the rhetoric of regional presidents is itching. would it be that damaging and destructive to the economy to have a little interest rate increase this year? >> no one knows for sure. here's what we do know. the fed was itching to get out of abnormal monetary conditions in 1937 and it produced a recession that in many ways made the depression great. in japan, on a number of occasions, they wanted to declare victory and get off the zero rate. every time it ended badly. in europe in 2011 they want --

they felt a need to normalize monetary conditions even though inflation hadn't taken off. and they ended up regretting it. you know the essence of policy making is balancing risks. and if inflation were to get to 2%, if it were to get to 2.3% that's not so bad for a variety of reasons. and that's something that's easily contained. on the other hand if we made a mistake and the economy tipped over towards deflation, what we've seen in europe, seen in japan suggests that could be catastrophic for a long time. so, we always need to worry about errors in both directions. but the more serious errors in my judgment would be the errors of hitting the brakes too hard and sending the economy into a skid. you know part of the reason i'm so worried or alarmed is that if

you look historically the fed's had to bring down rates by 300 basis points to combat recession about every seven years on average. we don't have anything like that kind of room. and so that's why it's particularly important that we keep the economy going on a reasonably growth trajectory. but look. there are a whole suite of inflation statistics every month. we have to monitor them carefully. and there will come a time when it's necessary to tighten. but i don't think that time is when inflation indicators are all suggesting underlying inflation well below 2%. >> your lines of the white's inflation eyes in the op-ed and just now rang in the halls here. we talked about it the day it came out. the reaction of some was, well you'll be killed by the enemy.

why is that misguided and what's wrong with a symbolic 25-basis point move just 0 showto show you're on the case? >> two different questions there. i've studied and others have studies the u.s. inflation process. the evidence is that even in a period when it's really overheating like the vietnam war period, you are talking about inflation increasing by 20 basis points a quarter. so there's time. when and if inflation starts to accelerate and you have got to balance the risks. what about a one-shot increase? it would be historically quite ab rant. usually when the fed starts to raise rates, it raises rates quite considerably over a fairly protracted interval. and given that historical pattern, i suspect when they do

raise rates the market's going to expect a sustained increase in rates. i don't think this is -- i don't think this is that complicated. we still are short of where we could be and the fed is below its inflation target. i mean when's remarkable in this moment is you know everything that i used to teach in my classes, everything i studied when i was an economist was always about the trade-off between inflation and unemployment. if you eased, you could bring down unemployment but you have to accept more inflation and that was the trade-off. now, we've got a need for more output, higher incomes for people, and inflation is below target. so i just don't get the logic until there's a credible inflation forecast that's above 2% i don't get the logic of raising rates.

you know you look at the -- what i think is a very important indicator coming off the index bonds that we introduced when i was in the treasury in the '90s. the so-called break even inflation rate. that break-even inflation rate that you can get by comparing the tips with the regular bonds has really suggested that the last six months inflation expectations have come way down. not going up. they were starting to go up you worry about economicover heating. >> okay. >> but not on the evidence we have. >> mr. secretary, what happens if it actually is really very different this time? if it's a result of the depressive-like state we have been in, inflation will stay low and central banks may not be able to raise it as they have done in the past. in the meantime they're inflating the balance sheets and blowing bubbles around the world. isn't the risks that actually the central banks do way too much to a point that they can never exit some may argue we may be there now?

>> some would. i don't see the basis for that argument. i monitor, others monitor pretty carefully where the stock market is. they monitor what's happening in real estate. i think if you started to see a set of valuations that were suggestive of the kind of conditions that existed in the year 2000 or the kind of conditions that existed in housing in 2005 2006 that would be a very big issue. i'd still ask the question whether there weren't more direct ways of going at it than raising ratds which affected all economic activity but that would be a very big issue. i don't see that. >> right. >> in the horizon -- on the horizon either. i think we are in a -- i guess this is the point i'd want to

leave your viewers with. we are in an extraordinarily uncommon and unusual place. the aftermath of the financial crisis structural increases in savings relative to investment a deflationary world economy, the rest of the industrial world, china. and so extraordinary conditions require extraordinary measures. so this is not the time for the traditional central bank playbook. this is the time for a recognition of what are some very real worries. >> i mean summed up well and been the story. as we look to 2016, it was just announced that the dnc convention in philadelphia. are you advising any of the candidates has you have in the past? >> no. i'm putting my views out there for anyone to consider.

as you probably saw, i was the co-chair of the commission on inclusive prosperity that produced a set of results highlighting what i think's going to be central for both parties in this election which is it's not enough to grow our economy. we also have to make sure that everybody gets their share in the economy. and if we're able to grow and share that's really what we need to succeed. and i think the danger is that we'll have a politics where some people want to focus on growth and other people will want to focus on equalizing the shares. and the reality is we have to grow and share. >> all right. a nice prelude there to some of what we're going to hear. larry summers, thank you for sharing your views with us as always. >> good to be with you. we have had a lot of action in nat gas.

bertha coombs numbers now. >> hi, carl. despite the fact of cold weather move in to the east coast, we had fairly cold temperatures over the last few days we saw smaller than expected withdrawal of 160 billion cubic feet. the issue here just as the issue is with oil, we're still producing quite a bit. even as people shut in rigs. so we are seeing a smaller than expected withdrawal. the five-year average for this time of year is about 178 billion cubic feet so this is a fairly bearish report although we are seeing prices stabilize off of the lows of the morning. also seeing a bit of a pullback a little bit in crude after more data showing that we're continuing to see bills in cushing. back to you. >> thank you. whole foods shares up sharply. changes to the image and price cuts seem to be working.

we'll tell you now what to do with the stock. meantime let's send it over to sue herrera for a news update. >> thank you, simon. here's what's happening. american express saying it's seeing negative earnings impact of the stop of dealing with costco and shares falling today. wondering whether to buy apple at the current price? and if you're going to disney world, make sure you bring your wallet. the tampa bay times says the price of a one-day ticket could top the $100 mark very soon. actually, 105 and mean the price of a one-day ticket would have nearly doubled since 2003. and there were three winners in last night's $564 million powerball jackpot drawing from north carolina, puerto rico and texas. for more go to cnbc.com.

coming up on the halftime report, former yahoo! interim ceo said he would pay jon stewart $100 million a year to relaunch his show. he will join scott wapner and the game at noon. there's the cnbc news update for this hour. [ male announcer ] your love for trading never stops. so if you get a trade idea about, say organic food stocks schwab can help. with a trading specialist just a tap away. what's on your mind lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move wherever you are. and start working on your next big idea. ♪ ♪

shares of tesla deep in the red after that disappointing fourth quarter. phil lebeau has more.

>> a lot of commentary of people saying did they have a bad fourth quarter? how bad was it? look at the numbers and you will say, doesn't seem extreme. well also keep in mind that from the perspective of a lot of investors they were expecting tesla to at least meet the delivery goals for 2014. but when you look at where they fell short in the fourth quarter it's pretty clear. deliveries below expectations. 1,400 fewer than what they were guiding to originally. there were ere l also higher costs involved as the company ramps up or begins to production of the model x in addition to new features being built into the p 85 edition of the model s and yes there was a strong dollar impact. keep in mind that tesla has a fair portion of sales over in europe and that's where you're most impacted because of the dollar euro divergence if you will and china. now, elon musk said look we had the wrong sales team in this

there advising people that it would be too hard to charge in the country and we think we have mixed that. finally, the commentary of elon musk getting the most play today is when he was asked about the future valuation of tesla and perhaps to the surprise of some he said that this is a company that could be potentially as valuable as apple is right now. here's what he had to say. >> if you take this year's revenue, you know around 6 billion, thereabouts, and if we're able to maintain growth rate for 10 years, and achieve a 10% profitability number and have a 20 pe our max cap basically the same as apple's is today. >> you heard him correctly. carl he said it could be equal to apple today. take a look at shares of apple versus tesla over five years. completely different companies and business plans.

but those comments have a lot of people talking today, especially on twitter, carl where people are saying is this guy nuts? he did it. you heard it right there. >> yes. he did. as cramer noted at the top of the show. thank you, phil. whole foods beating estimates by about a penny, posted record quarterly sales. co-ceo attributed to consumer confidence. let's bring in chuck grom to talk about what went right there. hey, chuck. >> hey good morning. >> i thought it was interesting, talking about chipotle sort of in the same business bragging about why price hikes -- i'm sorry, yeah price hikes are working. in this case price cuts working. >> yeah. i think that's been an initiative that whole foods outlined over the past year and reminiscent of costco in the past and i think what they're trying to do is regain the customer back after increased competition and price cuts

really probably only in the first and second inning of that initiative for whole foods. so you know we think they gain momentum as the year progresses but given the whole paycheck moniker, it's an important initiative for them. >> yeah. adding beer gardens to various locations. a big anchor of apple pay. how much of that is making a difference? >> right. well, i mean i think they can't hurt, right? apple pay about 2% of sales. you know? i think it's a number of things that whole foods is really looking to do. everything from their insta cart remodel, price cuts. they're offensive today relative to a year ago when competition we think kind of sideswiped them and when you look ahead, the company with easy comparisons, at least 200, 300 basis points compare and a lot more initiatives, particularly the price cuts and the remodels we think will drive the top line

higher from here. >> one of the problems that whole foods was facing chuck, was competition. that everybody in the grocery business getting into organics better foods and cheaper. obviously, the price moves are helping but a stock like kroger that stock goes up every single day. where does whole foods stand in the competitive market and gaining back share they lost? >> well i think we think that the comps stabilize in this quarter. going back three to four years ago, whole foods on an island and driving 7% to 8% to 9% comps and their success breeded successful from fresh market to earth fair to sprouts, trader joe's. guys have grown their store base and to your point, you know kroger added organics costco and walmart is adding organics and i think that's why they had a gut check last year. they looked themselves in the mirror saying we need to change the way we operate the business. they have begun to do that.

comps this quarter stabilize and we think they move higher from here. whole foods has one of the best in consumers minds. they stand for a lot. >> do you think their projection for north america need to be adjusted at all? >> that's a fair question. 400 stores today. 1,200 longer term. is that the right number? doing saturation analysis and retail is always very difficult. i will say that the recent new store productivity remains very healthy. you know? so whether they get to 1,200 organic organically, do they look to acquire other players down the road remains to be seen but look at five years and kind of at least five years and kind of bank on 8% to 10% unit growth into our models. >> chuck that's interesting stuff. thanks so much for your time. good to talk to you again. >> all right. thanks a lot. coming up cara swisher joining us.

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take a look at the utility sector. one of the worst performers today. again, dom chu with more on this. >> sara a classic risk on/risk off type of situation. markets are fractionally higher and technology doing well. the utilities are notable laggard here. names like dte energy and agl resources, northeast utilities, as well lagging today and worth noting, carl, northeast utilities is ever source energy and it will change its ticker to es next thursday as opposed to what it is right now which is nu. back over to you. >> thanks a lot. let's get to chicago. rick santelli and the santelli exchange. hey, rick. >> good morning, carl. i'd like to welcome my guest peter bookfarr.

good morning. >> good morning. >> thank you for taking the time. >> thanks. >> retail sales is on the weak side today but one of the biggest themes in the last six months has been the drop in energy and of course the drop in gasoline prices. doesn't that explain away a big chunk of -- granted, i think retail sales is weak and just ex gasoline see the influence there, about the price of gas, not necessarily how much is sold but the fact that it sold at a lower price, is it not? >> right. exactly. these are nominal numbers. it's the dollar number. but even ex gasoline sales we are seeing mediocre overall sales and i think because consumers are more willing to save the money. maybe sending more at the restaurant and ordering an extra appetizer or more expensive bottle of wine but i think ex gasoline not really seeing that pick-up that people were hoping for. just another mediocre number with a string of them. >> peter, couldn't there be

another number the hip pot mus in the room that everybody's missing. maybe it's a slow down a bit and the notion of counter factuals maybe the drop of gas is helping but we can't tell. is that not feasible? >> yes. people have other costs of living and people assume gasoline is all we have to pay for. we have to pay for health care. >> bigger premiums and deductibles. >> exactly. rent is going up 3% to 4% this year. we have to take the cost of living in the aggregate and that's got to be part of the equation in determining where retail sales go just because gasoline prices fall. >> we had larry summers on. smart guy. any economics test in the world he gets a better grade than me. there's no doubt about that. there's an old-school notion to the central banks that eludes me. how many times do we have to hear about 1937?

is this a one sample set that we limit ourselves to? and the other notion is when sara asked a great question a little normalization to send a message. he said we do tightening in cycles. maybe we need something different. your thoughts in the 40 seconds on larry summers. smart guy. maybe we need a newer plan and not a 1578 pl of one to draw conclusions for seven decades. >> right. well, it's -- he's from the keynesian school of thought. on the demand side. and academic that live by a model and markets don't work in cycles either in the sense they go one way or the other. they constantly shift. monetary policy should be that same way. seven years of zero interest rate is not prudent but bad policy. caused asset bubbles around the world and just to say i don't want to repeat 1937 as a rational answer in response to an improving labor market and an economy that doesn't deserve a

zero interest rate i don't think is a good answer. >> we are out of time. thank you. i wish i had a time machine and go back and make sure the fed didn't do anything with rates in '37 and not sure how much different the outcome would have been. back to you. >> agreed. >> thank you. fashion week going high tech. nicole mill we are gopro cameras in the show this year. the ceo joins us when "squawk on the street" comes right back.

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new york fashion week is kicking off our next guest has teamed up with gopro to give fans a look at what goes into a runway show. bud is the ceo of nicole miller. >> thank you. good seeing you. >> first tell us about this gopro experience high-tech meets the runway. what do you have in mind? >> i want to start with how nicole got into the gopro. >> okay. >> tell us. >> she's a big surfer skype surfer on the water and she got into the gopro to take pictures of herself in action to show us. then she's big in all of tech instagram, pinterest and sends it out to everybody.

then we figured out why just use it for sports and surf boarding and stuff like that. >> fashion. >> show everybody what's going on and the culture has changed where the culture now is look at me, look at me everybody is look at me. that's the culture. so the gopro fits into that thing sensationally, us saying look at us it's nicole saying look at what i've done at every angle. if they sent you a clip if you look at gopro from yesterday they have every angle of the show room. >> got it on now. >> there it is from yesterday and he brine, who runs our art department, had cameras hanging every place off the shoes and people's backs and stuff. it was great. >> what i like is not everybody gets to be inside new york fashion week. it's a huge event, big for the designer designer, big for the brand. you've done collaborations with everyone from jc penney to other high-end department stores.

this is a way that lets everybody else all your consumers, get in and would have to be good for the business. >> our business is really a visual exercise. this is a visual tech instrument. i brought a prop in case you guys didn't have one. >> i see that. >> we've seen them. >> you have. >> okay. >> listen redundant. i'll put it down. >> i was going to ask you, [ inaudible ] was doing live shows in order to sell the mer chans dice. >> right. >> could you do this live as an event or is that risky with so many people with their clothes off? >> no nothing is really risky. people see clotheses off all the time. that's not the thing. the thing is you have a limited -- sorry. maybe you don't have your clothes off about but everybody else does. >> i keep mine on. >> at a fashion show. >> in any case what does a customer -- what is a customer nature right now? they have a limited attention span.

the entire world is no attention span at all, attention span of cockroaches like this, remotes, the whole thing. you've got a split second to get their attention, a split second to make the point and gopro is the visual thing that shows it all to you. customer is getting a break on seeing the angles and different ways to wear it and all that stuff. >> just away from gopro and the show for a moment we got another retail sales report this morning for the economy that was very disappointing. now two back-to-back negative numbers on retail sales. what's your sense of the consumer? i know you operate at a higher end. >> yeah. >> when it comes to apparel but across department stores are you seeing the cheaper gas price influence spending? >> no. >> why not? >> our customers are not worried about filling up. >> higher end. >> whether it's $2 worth a gas. that's not our customer. but i tell you what happened last week while you're getting these numbers, you guys are financial wall street, let me tell you about little anecdote of our little business okay.

we have an e-commerce section of our business that we run. so what's the vareble? s there's no variable. the product is the same the people are the same figure the customer is the same. last week we had with nothing else happening, we had 169% increase on our e-commerce site. so it causes you, i'm the ceo, what did we do right? we can always figure out -- everybody knows what we did wrong. what did we do right? what is this all about? i'm trying to put sense to this figure and i can't -- and then the unit prices retail went up $100 each on the unit which is insane. that's a tremendous increase. >> what was the reason? >> what was the reason? so i am thinking that the customer is a refugee from not wanting to shop in stores. >> go on-line. >> we've got to leave it there. your outfit is getting a lot of attention on twitter, the mixed patterns. >> yeah.

>> nicole closed my twitter account down. >> thanks and good to see you. bud is the ceo of nicole miller. >> speaking of style almost time to strut down the alley. bring in jon fortt to see what's on deck. >> we're going to talk about tesla flipping after the results last night, trouble in china, and also with the new insane button equipped tesla going to talk about cisco, that is soaring after they're growing in europe and across the board, doing pretty well. have they mastered the next generation data center. apple at another all-time high. are they worth more than a trillion today like carl icahn thinks? we'll dive into that coming up on "squawk alley."

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