agree that i'm a yellow lab. >> i just think right there, having a dog actually tweet is more significant than the dress itself. but i -- did that really happen? >> not sure. i don't know. larry, didn't look like he believed. >> larry, pleasure having you here, thank you. >> thanks for coming in larry. >> have a great weekend. see you on monday. right now it's time for "squawk on the street." ♪ good fryiday morning. happy birthday to post 9. three years ago today we moved our show on to the floor of the nyse. we have never looked back since. it's been a wonderful set. continues to be. i'm carl quintanilla. jim cramer david faber at new york stock exchange. we close out the month. the best month for stocks in nearly four years. oil hoping for its first winning month since june. pennies above break even.

ten-year yields above 2. fourth quarter gdp revised down to 2.2, above estimates road map begins with the markets, shaking off that disappointing gdp number. as we kick off the last day of february. but the big question, could today be the day we finally see nasdaq 5k? >> retail's in focus, earnings miss, jcpenney shares down nearly 13% in the premarket. a better report from gap puts that company in the green. >> return of the mac. shares of mcdonald's up 6% in two days. why its shares could hit the $100 mark for the first time since july. but first up fourth quarter economic growth slower than the government expected. up 2.2% compared with previous estimate of 2.6. the nasdaq's up 7.6% for the month and is within 13 point of 5000. the dow rising 6.1%. it's on track for its biggest monthly point gain ever. s&p up 5.8. you don't get numbers like this

too often. >> no. january was gloomy people saying, gee, as january goes the rest of the year. completely wrong. we have conference call talking about lower energy costs. we don't hear much about the government. year-over-year, no one -- it's cold this year good for inventory and blowing it off at major retailers. retailer restaurants stand out, newer tech that suddenly come alive with pleasure facebook google up on absolutely nothing. and then -- whoa it was nothing. >> up on absolutely nothing? >> absolutely nothing. >> more buyers than sellers perhaps the reason there one piece of news they make no money on youtube. really. >> they have a lot of money to potentially make on youtube. >> are they trying to put a man on what planet? >> mars. >> mars. >> but look -- >> the moon the moon of saturn's. >> you know why the nasdaq's going to go through in this

morning 6:23 you got your notification from netflix that "house of cards" is now live. 6:23. >> that's going to move. did you know next friday is the anniversary of the hanes bottom? march 6, 2009? 1268. >> i should have mentioned, you mentioned yesterday, look at that, nice mention of mark haines. >> he was -- where was the s&p? >> 667. >> sign of the devil, right? satan? >> meantime, gdp up in we mentioned the down revision. but the biggest boost to consumer spending since the fourth quarter of 2010. i imagine you think this is gas prices talking. >> every night, you are on conference calls and it doesn't matter who it is whether a ross stores cracker barrel. you hear these companies just say, point plank,blink, we're doing better because the consumer has more money. monster beverage, with a totally monster number.

not ironic. great things in this quarter. i'll go in to them later in the show. it's hilarious. talking about things they're doing, including taking the juice out 0 one of the drinks which increases the taste. >> what do you put in to replace the juice? >> better living through chemicals. >> monster's amazing, 72 cents, 13 cents ahead. since 2010 the stock's up 502% courtesy of the street.com. >> deserving, 34.8% share, equal to red bull rock star going down remarkably. it's an incredible story. when they -- remember at the beginning of every conference disclaimers. i thought this was good our products are safe. always good to have that. >> always. >> renamed the m-80 good process, pulled it ripper linked to a famous serial killer of two centuries ago. you have to wonder whether they're in on the joke. a healthy increase since the rebranding. >> interesting.

>> are we all -- are we going to sell stocks monday going into march? we'll start worrying about the upcoming fed meeting and all of that business. >> you know, when you look at the -- what's going to set the tone next week costco i think better than expected. they have a gasoline lag will back that out. target an analyst meeting. brian cornell saved the best for what will happen unfortunately some job losses but rationalize the company. next week is a light week but autozone reports a bad number stock goes higher when they do their buyback. most important, i think, will be best buy, because -- >> best buy's the most important? what? >> consumer's spending on anything else other than hershey bars and monster drinks. >> that answered my question. is that really going to be a reflection in you think that's an effective -- >> has not seen that benefit yet. i want the consumer to step up a

alea little. >> will it get to the tiffany level? can you expect that? that's a different class of spending that wouldn't necessarily seem to be as impacted by a $1,000 a year savings on gasoline costs. >> we want something bought for $600 more than an iphone and maybe best buy tells us that. i'm using it as a data point to see where the consumer is. >> great "the washington post" piece, looking at denny's at 17-year high. ihop with the best sales in more than a decade. we were going to do mcdonald's. might as well do it now. that is what 6% gain's all about. >> february could be a turning point. we don't know numbers. dine equity great social immediate yap denny's was a grand slam sorry, can't resist. >> mcdonald's, it's interesting, stock's up new ceo taking over. everyone will tell you, sg&a for stores too high. a meeting this week in chicago, a number of hedge funds i know

attended, and the incoming ceo said, i was quoted as saying i'm going to be your best activist. it didn't mean he's going down this reit structure that some are advocating. >> no, we don't want that. that's a sears strategy. >> i don't know about that. franchise fees and rent on each of the stores are your main every knew streams there. >> right. >> jim some people will tell you, and i'm quoting here from one conversation if you recharacterize and lever those through a certain structure, that's a beneficial thing. is that financial engineering? yes. but does it necessarily create value? it might. doesn't mean he's going down that road. seems the focus has to be on efficiently changing the menu so it becomes more efficient, sg&a starts to come down on a franchise level. >> right. franchisees rebelled that's why the ceo -- we had skinner on chairman, said we stick by thompson because -- >> whose last day of work is tomorrow. >> right. what's most important, what i

see, the franchisees got to win them back over. one of the ways to win them back over make it so it's not impossible, not a panera-like menu. the most difficult menu i've ever seen. >> a meeting in las vegas next week. and the new ceo, obviously, will, one would expect will perhaps even be introducing new ideas. >> charitable trust closed out your position february 19th. >> yes. we got a change and i thought that was it. i didn't know about the hedge fund meeting. obviously, sold panera. panera had been up a lot. you want exposure to the consumers. moving toward target i think target's got it going. >> there had been a question of activist in mcdonald's. there has not been one, certainly not of the branding -- branded activist that we think of. that doesn't mean there are large shareholders there. perhaps more of the institutional variety who are pushing behind the scenes. i think that there's a case to be made. >> you had kind of motivation --

>> they've gotten something they wanted, which is a change in the top office. >> you need that menu. you need bathroom's clean somewhere menu's simpler, and then we'll all go back. we've been going to starbucks. >> which posted its tenth record of the month. unbelievable. as we watch coffee collapse. >> yeah. >> look at the margin's going to be like. >> they didn't lower the -- i believe starbucks, the senior growth stock, it goes higher and higher. people buying it off -- coffee price, forget it chinese expansion, buy it over the european comeback and buy it over the food buy it over the new strategies, howard schultz hitting on every cylinder. >> gap holiday quarter earnings above estimates, revenue in line as comps at old navy up 11. gap forecasted drop in full year profits citing strong dollar in the port disruptions.

jcpenney missed forecast weighed down by holiday discounting and investment in store expansions. comps were up 4. 4 and were looking for 2 to 4, a bite spot. >> gross margin not good. still talking about the self-inflicted wounds of the previous year. enough already. enough already with the self-inflicted wounds. gap stores, it's difficult, the new ceo starts out saying we're not satisfied with the performance at gap. i like the stock but wait that said other divisions are very good. there's a sense that athleta is a lulu challenger. i like the momentum. i think the new ceo of gap has a lot of cash behind what he wants to do but has to change the gap stores. merchandise is already ordered for the fall but the urgency's there. >> banana's all right. >> on fire. >> up two. not bad. >> no. >> navy up 12. gap down -- >> denim, enough denim. we're in the denim glut now.

you can see that from pvh. enough denim, guys. >> interesting. >> they say denim's showing signs of a comeback. i don't find denim all that different. >> yesterday i was reading a net out of citi levi's cap x up 50%. runway shows showing denim will bleed into mass appeal. >> i'm saying my worry everybody's embracing denim. denim denim's hot. everybody seizes on denim. no differentiate. target will not seize on denim. it will seize on baby and i think cosmetic. >> did i hear you say jcpenney should no longer be blaming the previous management? >> at a certain point you own the stores. target -- cornell comes in and decides six months i'm getting rid of canada. here we go. some of the best opportunities in home kids and footwear. still trying to fully recover from the self-inflicted wounds of the previous strategy.

no. you can't do that anymore. it's yours. it's yours. if i could -- still talking about homecoming back. no no. you own that. and the dot.com we thought exciting, they have to spend money. ala nordstrom, which spent 3 billion and is getting it right. disappointed in jcpenney though you read the call it seems like it's great. i like gap but they say they're not happy. they're not happy. i like that attitude. >> retailers spending some dough right now. >> you know who's happy? dress for less. ross stores quarter thing of beauty. expanding. may benefit from the port situation. they'll buy it for little sell for high. ross stores -- >> a word at one of those conference calls. what do they call it? package -- i forget. being able to buy at a discount a benefit to a number of companies. >> i think it's schadenfreude is what you're looking for. >> no. it's not schadenfreude. >> when we come back return of

"house of cards," season 3 officially launched what happen it means for netflix which has seen its shares surge more than any other nasdaq 100 component this year. also ahead -- fcc commissioner ajit pai voted against the new rules, his take. one more look at futures here. dow's going for its best point gain ever but it's going to be tight. up 1041. the record 1049. more "squawk on the street" from post 9 in a minute. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to

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♪ it's what fans of "house of cards" have been waiting for, netflix has begun streaming the third season of the flagship original series with batch of new episodes. shares up more than 40% so far this year. a lot of discussion from people who were up until 4:00ing 5:00 a.m. trying to see as many episodes as they could stay awake for. >> talked about binging last night, how much we'll watch, whether we have to husband it to later on. allowed to talk about season 2? >> we had the producer on yesterday on "squawk alley"." i mentioned something and he says you're never free of spoiler alerts. >> really? >> then, i'll do an anti-spoil anti-spoiler.

i hope to see zoe again. >> she's gone on to bigger and better things the actress, i guess, who played her. this is obviously a big winner for icahn. one of the greatest. wow, their entry point. interesting to note, icahn enter enterprises reported numbers, did not have a good year last year. ownership of transocean. ownership of chesapeake, which by the way, chesapeake down sharply yesterday. was it yesterday? >> i mean doing 6 million shares, it probably goes up. the companies have to raise capital. every one of them. pure permian. >> apple has been the apple of mr. icahn's eye, up 73% in the last year. >> we have a date for the watch now? >> march 9th, monday. an event, spring forward as the invitation said. >> yesterday, ginni rometty did more for apple stock than ibm when she talked about --

>> you did more for apple. they were deep sixing it until you brought it up. what she had to say about the partnership announced last july to focus on mobility and the enterprise. >> you're going to see these apps. i couldn't be happier, i know i would speak for tim as well about where we respect by the end of the quarter, first 25 apps out, first 12 out already, next 25. to me they really highlight what this promise of they the gold stander for consume ability, us the gold standard for the enterprise. >> there you have it. apple stock did move on that. >> yes, it did did i did a lot of work. what did ibm not do right? the 4 billion number. the ideal company to buying splunk amazing -- >> stop you, the 4 billion, 4 billion in additional expenditure that they will move if you will towards what they -- the growth areas, whether it's security cloud,

mobile, or social. >> security and cloud and data analytics is the sweet spot of splunk. put you in for security ala macy's. once in, they offer sweeter data analytics. that's what she's talking about the fast growth but it's 8 billion. you have to spend 12 billion to get that. instead they have to feed the warren buffett beast, the buybacks. >> still not spending enough in. >> martin the cfo, terrific guy, the goal is to try to not pin down how much you're going to spend, but to how well you can dominate and compete against a sales force, how you just go by splunk and say, it's yours, it's yours, splunk. and it's the hunk product of splunk doing so well. >> almost uniform admiration for splunk's quarter. blair calls it a blowout quarter across all metrics. jeffrey's takes their target to 90. >> thing of beauty. it's funny, these guys from

splunk they have a comic approach. it's sullivan, he's dynamite. he's saying at start of it that was one of your best disclaimers yet. talk about a rock star quarter, cloud's doing great, business is on fire. all of the phrases you need from ibm. beautiful conference call. >> to your point, the splunks of the world or marc benioff, are they just going to keep taking share from these growth businesses that ibm is counting on. >> taking share, taking names, yes. i mean s.a.p. bought they needed to get in not desperate but not doing that well. but that was a nice big buy. >> you think ibm should be doing the big acquisition to change the profile and that's not enough to invest $4 billion in these, which are growing quickly, 25 billion in revenues, saying it's going to be 40 billion, big target. growth rate on 25 billion over 3

years to get 15 billion in increment incremental revenue is not insignificant. >> i'm telling them what to do. giving them 10 billion acquisition that splunk would sell tomorrow. >> splunk would sell tomorrow. >> the guys who run the company, interested in -- it made money. david, look ginny, david, martin, doesn't matter, by splunking, stock goes to 180. stop doing the buyback. do it after becky, after the interview with warren then buy splunk. i'm raising my price target to 185. >> people want to know what happened to zoe. >> not allowed to say. >> you see? a lot of people haven't seen season i yet. >> when push came to shove. >> oh. >> you're terrible. cramer's "mad dash" as we count down to the opening bell. take another look at futures as we close out february. more "squawk on the street" is back in a minute.

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♪ all right. time for "mad dash." final trading session of the week. where are we starting? amazon. >> bears do not listen to what i'm about to say it will drive you up a wall. you will be -- aaron rubenson talking about how like costco which reports next week amazon prime is a yield play that they have so much money from identifies a 3.8% it's a faux

yield, that amazon can give you. just saying amazon is going for profitability, don't you believe for a minute that the last quarter was an aberration. >> i want to understand. yield play? >> saying that it's like costco you can have a huge amount of money once they get prime up to a certain price, and they have all of the distribution centers in, that that is a major profit driver. you know what? those who like prime can understand that we pay more for prime. i pay more for prime, costco and netflix. that shows you value, value, value. >> prime includes many different things including the video service which is getting robust. >> fabulous. >> netflix charge you 7.99 a month. >> exactly. be aware, rubenson's piece -- >> federal express. >> fedex is one of the stocks as long as airlines ual, look at fedex, this stock's biding its time since it reported that good quarter. okay credit suisse says a great

quarter coming. ground network where the money will be spent. talk about planes too expensive. ground network profitable. they're saying fedex, the money's coming. it's going to be very high gross margin quarter perhaps because of the money spent on ground. i love this call. i love this -- >> it's an airplane company. >> i know you're a technician at heart. >> you know that for sure. absolutely. i can work on lots of things. i own a couple of screw drivers. the opening bell coming up after this.

you're watching cnbc "squawk on the street" on friday. live from the financial capital of the world. the opening bell in about 45 seconds. we'll close out the month of february, going to be tight on some break-evens. s&p at least for the week s&p's going for its fourth straight week up. currently up .44 of a point. and then there's oil to break even for the month. got across 48.24. basically there. >> yes. i mean 13% of the s&p, but big caps being hurt by oiling obviously. that does matter. the big caps helped by it in some ways across the board but not spiking the way the oils are plummeting.

>> yes. so with that let's get the final opening bell of the month. get a look at the s&p at the top of your screen. down here at the big board, home furnishings retailer ethan allen interiors, highlighting new product designs. they have a sofa right next to our set. >> a bunch of iterations coming out. last quarter was not a good one. they suffered from inventory people didn't like maybe i believe they weren't ready for the new product and people are looking for it. this might be a second half of the year once the new product comes in it's being rolled out in stages made in america. >> yes. at the nasdaq capn. monster beverage is going to lead the pack no doubt about that, 11%. >> you've got 16.5%. coke come coca-cola stake. european numbers fantastic. nothing bad on the call whatsoever.

one of great numbers they had to spent $2.9 million defending themselves from regulatory matters down from 4.7. a big increase in gross margins because they no long have to say we're healthy, we're healthy, at the same time that branding of m-80 to ripper is questionable. a like the story very much. >> you mentioned the upgrade of fdx, also upgrade of csx at bmo. >> it's funny, i read that and felt like it's wow, take your time like 2016 story. it didn't have the pizazz that i look for in an upgrade. >> take it to an outperform cost cutting opportunities, improving pricing all they they say coal continues to remain a headwind and could get worse. >> the rails have gone out of favor here because fracking's not that good. now i want to hear what becky asks buffett. the biggest airline -- sorry, the biggest rail reevelevered to oil -- i mentioned airlines because the airlines are

beneficiaries, upgrades. alaska air a hot stock. i prefer airlines to the rails in the transports. >> bank of america is going to be the third worst performing s&p stock on this ubs downgrade, looking at what they're calling risk of qualified failure in c-car. >> a bad downgrade. it basically said look out, not returning to capital you like. was really a downer. >> it was. >> a downer downgrade. >> debbie downer. >> brian moynihan, wow, time come out but he can't because the government's got your hands tied. >> price target goes to 16 at bmo. >> qualitative failure, sounds like abort, abort. >> yes. missteps in capital planning quote, making us nervous. so we'll watch all of that. >> i'm nervous. >> it's interesting how for the course of the month big equity gain but was the ten-year really has -- it's come in it's come

out. >> you know the ten-year buffeted by the fact the portuguese ten-year's low and the spanish ten year and italian ten year you've got -- >> go through them for people. 1.347% if you fiv your money to italy for ten years. spain will give you 1.275. >> but 25% unemployment? >> yeah. again, ten-year. listen france .603. that makes the point. at 2% we're like whoa. >> you know, one of the things that i would do if i were at any money in europe i'd buy dollars and buy the ten year, it's a great trade. >> that's what's happening. strength in the dollar. >> talk about janet yellen but it's important to talk about 770 million people who have pension plans in europe and taking their euros and coming here. they have to. they have to. >> yeah it ain't pretty. actavis goes up. this morning it's wells fargo saying they continue to believe actavis is the best positioned

company, specialty pharmaceuticals with agn in the fold primed for sustainable growth organically and through acquisitions. huge offering this week. >> that was smart. really smart. that's what valeant should do but i don't want to lump valeant in the same sentence as actavis. i'm looking for rerating of johnson & johnson. people are saying alex gorsky wants to make a move with 14 billion in cash perhaps willing to sacrifice the aaa down to aa to make acquisition. a lot of people throwing cold water on that one the ft did a story, it's a done deal that was bad. i like the way j&j acts so to speak. >> interesting when j&j wants to get in i mean so many acquisitions that have been done including salix, already inverted themselves, meaning they conceivably can pencil out better numbers from an acquisition than can another

buyer which means it's more competitive, harder for j and j or pfizer. they are enormous companies that have ability to pay whatever they want really. but it makes it more difficult. >> sure. to do those deals. >> at the same time j&j has good organic growth and they -- remember mcneil's almost fully back at drugstores, that's positive. >> yes. >> and i think that gorsky's saying i'm not going to tolerate divisions that are not doing well and it's time -- they have a good pain focus and a good mental illness focus but it's time for them i think, to make a major acquisition. it's not going to be buying a sales force offer in drug company. i think it's going to be boelgd. i think it's going to matter. >> really? that's interesting to hear you say that. >> it's going to be bold and will matter. >> size, it could be big. yes. >> month-to-date, looking at the dow components for the month, best performers want to guess? dow component for the month? >> mcdonald's.

>> disney. disney at 16%. >> bogb iger deliver, deliver. this is a year if you can raise price, your stock goes higher. you know, monster. >> should we call him the mailman, ala karl malone because he delivers? >> i love that. you know, he's still got a couple of more years at the helm. >> quite a few more actually. kept pushing july is it 17 or 18? >> very strong that story. very strong. >> a couple weeks away from "cinderella" and the "frozen" short. >> yes, so much of a like. holy -- china coming. but, theme parks, don't forget they did call out gasoline as six flags. >> it's so much larger than any other company in the media landscape at $180 billion market value. >> deserves it. >> priority -- >> time warner, well more than twice the size. >> how many espns can they have?

how about the app? is it not the greatest? watching like the duke/virginia tech game. >> better figure out the apps. one thing i argue with eight, how much you're paying for espn and the fact there's cord shaving and cord cutting going on and it is a question. it's a question. sports programming, how much will we continue to pay for it? particularly if it becomes sort of an a la carte issue. not that we're there yet. nor will we be for near term. >> it's a pretty much all cylinders. some might argue -- people aren't talking -- movies are just incredible. >> broadly, jim, year-to-date spx point move half of the advance is in ten stocks. it's apple, amazon pfizer biogen disney, gilead, boeing lilphilip

morris. >> justifiably moving up raising numbers. >> so you're not worried about thinning ranks of leadership? >> no i'm not because i think the second half of the year you're going to see energy costs of companies go down i believe the dollar could stabilize. second half tailwind for a lot of the companies that had hedged energy, energy hedges are coming off. i see a lot to like provided oil does not spike here. ain't spiking. we're seeing production numbers from oil companies that are dramatically improved from last year. even as they cut their budget. >> let's get bob pisani on the floor. bob? >> carl in an upward market it's typical to have a small group of stocks with disproportionate weighting because certain big caps when they start doing well remember s&p, market weights even rick sherlund have disproportionate. it's not unusual.

what the rick sherlundearnings situation is like. first quarter 2015 numbers below first quarter 2014. right now, and that's a little unusual. this would be the first time in a while, 27.21 dollar estimates, market cap weight estimates on the s&p. last quarter, quarter 120 147 that's significant. even quarter two, looking out, where the numbers are above the numbers last year. it's below, 29.57 for the second, 2015 second quarter 29.77. a sign of concern. let me move on. talk about gap here. they reported earnings in line with expectations. guidance a little bit weaker than anticipated. here's what's important. explicit commentary why numbers are below expectations. look at this 16-cent impact.

from foreign currency fluctuations 13 cents, delay at west coast sports. thank you for telling us that. that's 10% of earnings for two explicit reasons. why some of the companies are giving conservative guidance. help from gap putting that up for me. finally 5% month going. virtually everything is up 5%. nasdaq up 7%. this is very unusual. this is only happened several times. s&p is up 9 out of the 10 times in the month following it. i think this is very interesting numbers that we're taking a look here. you think that -- put up the box here -- you think after a month like this, the following month would be to the downside. but in fact it's not. according to kensho s&p up 5% it's up nine of the last ten times this happened. average gain 2.4%. i think the point is it's a little counterintuitive. when the markets got strong 5%

move is not enough to exhaust the upward momentum. interesting stats from kensho. back to you. >> to the bond pits. rick santelli in chicago for us. good morning, rick. >> good morning, carl. well, even though 2.2 is a far cry from the previous quarter's 5% indeed was better than expected and the whisper number on the floor was one handle you didn't see huge move in treasuries despite the notion that, if that revision stands for our last look it places gdp at year for 2.42 and change. intraday shows down to 2.02. down one on the day, eight on the week. settle at 2.11. of course, last week year-to-date chart 2.11 settlement close to high yield close of the year on the 17th at 2.14, so the last year at 2.17. two-day chart of the bunds dabbled un-30 basis points. a smidge above it as you can see on the chart. maybe the most interesting

trade, though continues to be the currency side if you look at this one-day, euro versus dollar, it looks bearish until you put it against a two-day. yesterday an avalanche of selling compared to today. we're hovering at the lowest level since the fall of 2003 which of course means dollar index, yes, best level since the fall of 2003. the secret chart i'm showing you today, 28-month high on the dollar versus the chinese yuan. back to you. >> when we come back chicago pmi, don't go away. ♪ [piano background music begins] ♪ we are one, we are essentially

the same regardless of where we come from. um, there are definitely things that are different about us culturally and everything else but at the end of the day we are the same and we really need to start seeing the world as a place that was gifted to us. [thunder and rain] [thunder and rain] [thunder and rain]

snur welcome back to "squawk on the street." rick santelli here. you have a heart condition, cover your eyes because the latest read on chicago purchasing managers survey didn't match 58 for expectations. it's 45.8. 45.8. as i was looking to get a comp last time under 50 boy, i could fine the last time we were under 50 april of 2013. but to find a number this low, i

didn't bring enough paperwork. that is really a low number. so i'll have to get you back tonighton the comp. not many expecting this number. what's the response in a marketplace, and it is key, extra ten points of selling in stocks. interest rates, hovering 2%. my guess is next time you see me top of the hour we'll be below 2%. carl, back to you. >> not far away right now. rick santelli. we'll see you in a few minutes. in addition to the news you probably heard about this thing going around on the internet about the dress. did you see black and blue? did you see white and gold? buzzfeed traffic, record traffic, jim, for buzzfeed 20 million views. one point last night almost 1 million people at one time talking about this. you and i've we've had conversations about twitter being episodic and relying on big events. now day to day. >> dick c. has to follow up

dick c.'s moment twitter handle, his moment. he's got to embrace it. keep the fire stoked. the fact that this could beat the llamas i mean the llamas were major lion share for 45 minutes of the country. >> true. >> it was trending in somebody said they needed a part where they release wild animals once a day. >> i thought your analysis of the llamas they left a man behind. you're not supposed to leave one behind. >> there were three and only two ran. >> the dress i have not weighed in on the color. tell me what to do carl. >> my wife and i had a fight about it last night. i see black and blue. she sees white and gold. the morning shows have the same discussion. twitter above 49. >> i think twitter's doing a lot of things right. that last quarter was impressive if they can figure out a way to block people who do multiple attacks on@jimcramer i'd be happeny talk

happy about using phone numbers. dick c. i'm impressed, he's coming back. >> prices for used electric cars droppinging. according to "the journal," tax credit, battery concerns cheaper gas, conspiring to limit sales, mostly of electric vehicles coming off of leases. "the journal" cites national auto dealers association stats that electric cars depreciate almost twice as fast as their gas powered peers. we know what happens to values the minute you drive off the lot. >> we know tesla would dispute than you know if you go -- tesla's a coal stock. you say something about tesla, that's irrefutable. maybe they'll come with an asster risk, our cars have not done that. >> is it. >> our cars do not lose value. many moving part tofz tesla. tesla, still has the field to itself. still not anyone out there with that kind of car. it's not going to be second half of the year you see plug-in

hybrids. there's a pro and con. >> the love for tesla's from "consumer reports" earlier in the week two years running, those who own them love them. not everybody has them. >> i say it's a great car. it's not a great stock. that's my take. we'll get "stop trading" with jim. dow's down 42 points on the disappointing chicago pmi. back in a minute. what does it mean to have an unlimited mileage warranty on a certified pre-owned mercedes-benz? what does it mean to drive as far as you want... for up to three years... and be covered? it means your odometer... is there to record... the memories. during the mercedes-benz certified pre-owned sales event now through march 2nd, you'll get complimentary pre-paid maintenance and receive your first two month's payments on us. only at your authorized mercedes-benz dealer. [ 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

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♪ time for cramer and "stop trading." i talked about how coca-cola's had a close relationship with monster beverage. j&j does have a close relationship with pharma ci -- think the cancer franchise is something that j&zwrchltj does covet to block celgene. i think the stock's moved up too much. >> even up too much to account for potential premium that a

buyer would pay? >> i think so. the stock's moved up too much to do the deal. that's a stock that can cool auch. off. i think gorsky's got what he needs from the partnership. potbelly had momentary mojo and the cfo leaves. when a cfo leaves particularly that one often thought of as the master -- >> going to a competitor, by the way. >> mast somewhere commander of got bell potbelly. giving back. i prefer denny's. i prefer honestly i've got popeye's on tonight. that was killed. >> what else? >> two stocks. blackhawk was horrendous, yet i think that bill tauscher has to explain what happened to revenues. that's a great story. the company that does cards, the wall of cards.

er. there's answers that have to happen. they may turn out to be opportunities. >> as we close out february there's a point you want to sell discretionary and buying utilities? am i wrong? is that day coming. >> somebody upgraded i don't want to mention, had a sellen uil, got a bid from the spanish last night. i don't know. i still -- i am waiting for the banks to have -- follow jpmorgan which had a great analyst meeting, that's 17%, 18% of the s&p. i think we'll see continued rotation in salesforce.com and out of the big cap pc-related companies, doing not well. >> a couple of napes we didn't get to arcp remember that name? of course. >> oh, how are they doing. >> audit financials will be done by march 2nd, when they said they would be. now they can go on to find a new ceo at arcp. big named activists in the stock as well.

but it's up 5.5%. and then there's t-mobile tmus keeps going john legere saying the same thing he said last week hey, we asked, would it go well with our portfolio? darn right. >> where is he? where is he? but where is he today? >> he's in bond. people are thinking that he's there to talk talk about something major with deutsche tell. >> and they did say some things yesterday which led people to believe they're a potential seller. >> he tweets that. he did ask people to smile more, which i thought was great. that's why i thought the german confluence -- wherever he goes he creates excitement. makes our business exciting. >> creates excitement. >> have a good weekend, jim. see you tonight "mad month

money." >> breaking news on consumer home sales. ajit pai.

♪ good friday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen who is back. we'll take it. simon hobbs, david faber. closing out the month of february with declines in stocks. chicago pmi a disappointment. crude oil, though trying trying for its first winning month since june of last year. >> to the road map this morning. fcc approving rules for net neutrality. we'll talk to commissioner ajit pai about the new rules. he voted against them. hedge fund underperformed broader markets in recent years but hugely popular with big investors. why? jim stewart will be here to weigh? consumer advocate ralph nader thinks walmart's move to raise wages is not enough. he'll join us later on.

rick santelli. news on consumer sentiment after the chicago pmi number. good morning once again, rick. >> good morning, carl. i was wrong by the way, we're not under 2%. hat in hand with the feeling in the treasuries last couple of weeks. it really seems as though the buyers have limited impact. here we go. february final read on michigan 95.4. comparison to its mid month read at 93.6. how does 95.4 fit? comps to january where you had 98.1 which was the highest going all the way back to 2004. just a quick tombstone on chicago, that was the weakest number since july of 2009. since that number there have only been three under 50. this is not very good. now let's go to one of the most economically vibrant spots in the country, washington, d.c. to see what the read is on pending home sales from our expert diana olick. >> well rick thanks. pending home sales up 1.7% in

january, month to month, up 8.4% year-over-year, ard coming to the realtors. the fifth straight month of gains and highest level of pending home sales since august. street looking for up 2%. pending home sales are signed contracts in january that are future indicator of closed sales that we'll see in february and march. now the realtors are saying this is increasing even due to very tight inventory but express concern about rising home prices. the chief economist says if we start to see double digit price gains again, that's going to hurt the spring market. locally, northeast pending sales up 0.1% midwest west down 0.7%. south, up 3.2%. in the west up 2.2%. one good sign investors moving out, so there's not so much competition for first time buyers. also all cash sales are dropping. if you miss the numbers i put

them on line for you. >> a beautiful day in d.c. thank you. diana olick with the housing data. markets off lows, down 25 points on the dow but in the red in the last day of trading for the month. ten-year, as rick was saying above 2% after the weak pmi data. even still both the dow and the s&p, of course have had their best months through february since october of 2011. keeping an eye on oil. we could see the first monthly gain for crude since june. michael gappen chief economist at barclays and also joining us dave katz. >> good morning. >> michael, i want to kick off where we are on consumer sentiment. we've had figures come through from rick there within the gdp data consumer spending last quarter, climbing at its most in four years. we've seen an acceleration on the consumer discretionaries, certainly during the course of the month. how would you sum up where we

are. >> are we accelerating with consumer spending. >> the data reflects decline in energy prices we saw last year. the peak of that effect took place in november perhaps into december. we still think it's supporting consumption spending. it's supporting consumer sentiment. i think that effect will fade by the end of the first quarter and then you're looking to where labor markets leave the consumer for the rest of the year. so maybe the peak is a bit behind us but it's still supporting activity. >> michael, talk me through that and explain, if you would, why would we peak? if gas prices are still low, people still making savings, savings that can be spent elsewhere. >> in terms of the quarterly rate of growth you get the initial decline and it passes through it gives you an initial boost and the quarter rate of changes. hard to get the growth rate to continue to accelerate. the growth rate shoots up higher first and then comes back down but it doesn't change the

picture that the consumer's benefiting. oil goes from 100 down to 50 and stays in that area certainly there will be a windfall to support consumption over time. >> david, what about the stock market? what's the best place to be? obvious obviously the broad market up 6% for the month. consumer discretionary big gainer in that. where do you go from here? >> first we would not chase the rallies. we liked stocks for 2015 but we think you'll have volatility. a adown january, stronger february. don't chase the rallies. next time you have a sell-off we'd be adding to stock. we think financials which started poorly are due for a very good year. we like select industrials. shockingly we think oil and energy stocks are going to be a good place to make money this in year. we also like the old technology, that's one of the worst performing groups starting this year microsoft/hewlett-packards of the world. money flowing out for the short term. but a 6 to 12-month time

horizon, good places to make money as well. >> does it seem weird we're set for best month with deteriorating economic data losing momentum we had from last year and declining profit growth? >> we don't think so because, remember, you had a poor january. so off of a very weak start to the year you've had a rebound. we think that earnings for the fourth quarter are in line to the last few quarters 68.5% of the companies beat. companies lowered expectations for the year primarily currency related. we think now that the bar has been reset, that earnings are going to do better than expectations as the year goes and the forwardmarked's a forward looking indicator. >> the dust has settled on janet yellen's testimony two day of testimony this week. where are you on the actions of the fed and what that's like lie to mean for the markets? >> so i think the big message from yellen's testimony is that the fed's ready to end forward

guidance or its pledge to keep the federal funds rate at zero lower bound. i think the message is that starting in june committee will be on a meeting-to-meeting decision when to raise rates weep think rates will go up in the second half of this year. but the message is also one of a gradual rate rise where the fed wants to be seen as moving slower and later. as long as that message holds, it shouldn't be too much of a deterrent for the markets although there may be volatility at the beginning of that starting of the rate hike cycle. >> what do you do with energy shares? now that february's set to be the best month, at least for u.s. oil that we've had in the last nine months first up months do you buy energy shares or wait this out because what we're seeing are wild swings in this increased volatility in the price of oil? >> we think if you have a 6 to 12-month time horizon you can be buying the energy stocks here. we would focus on the biggest and strongest companies, the royal dutch petroleums the chevrons of the world, exxons of

the world, they're going to get through this paying a very nice dividend. since 1983, five sell-offs of 50% or more in oil prices. the subsequent six-month period oil prices were up over. 70% in the subsequent 12-month period they were up over 90%. we think people will be surprised with the bounce in energy at some point in 2015. we think the economic value of oil is $80 a bafrlrrel we will start to approach that by the end of the year. >> thank you very much. have a good weekend. when we come back the fcc approving new net neutrality rules yesterday, as you no doubt know. joined by fcc commissioner ajit pai, he voted against the new rules. we'll find out what repercussions are in store when "squawk on the street" returns. ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs,

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happy friday. monster beverage shares staging a monster upside move after the energy drink maker posted profits and sales that beat estimatesen it attributes strength to continuing international sales growth especially japan which is becoming one of its biggest

markets outside the u.s. monster said it and coca-cola expand aspects of their partnership. as a result 13% gain one of the best performers in the s&p. back over to you. >> it was a good quarter. thank you, dom. next, call it a tale of two retailers. both jcpenney and gap trying to turn around their business but was turnarounds taking adifferent path in the fourth quarter. you see it in the shares. plus ajit pai joining us when we come back here on "squawk on the street." thing more romantic than a spontaneous moment. so why pause to take a pill? and why stop what you're doing to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain

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after more than a year of debate, the federal communications commission has agreed to impose tougher regulation on the internet, setting up a legal fight with the telecom industry. the new rule allow the agency to prohibit internet service providers from granting faster access to companies that pay for that privilege. outspoken invest somewhere entrepreneur mark cuban minced no words, criticizing the plan on this program yesterday. >> it's not going to increase investment. there's no scenario where people will invest more money so there's no scenario where you're going to get more competition because of the regulation. you know it's just crazy.

it's just -- you know i don't understand. the decency thing and the regulation of the internet, that's why i'm shocked. how is octoberocculis going to deliver, how is google able to manage self-driving cars in an environment where they have to put it over an open internet they could buffer? >> joining us fcc commissioner ajit pai. good to have you back. great to be back with you. >> i'm sure you probably agree, in some part with cuban, yes? how disappointed are you? >> i'm very disappointed. most disappointed for the american consumer. in the short term it's going to mean broadband bills go up broadband speeds go down and it's going to mean less competition, not more in a lot of the markets where there's not enough competition as it is. >> you called this a solution that won't work to a problem that doesn't exist.

what do you mean by that? >> you could certain in vain through 317 pages to find any evidence of the fcc identifying a systemic problem. they cite case of unknown north carolina isp a decade ago, comcast from eight years ago. if this was a problem of a broken internet one expect to see examples all over the place but you don't see that. the reason the internet thrived free from government regulation. even if there was a problem, the so-called solution that the fcc adopts is not going to work. it's going to inject the fcc into every aspect from the user relationship to the core internet. that's not something the fcc's legally empowered to do and it's not something we have expertise to do in a dynamic industry. >> wheeler did say he doesn't expect onerous regulations like price controls. why do you say the consumer's going to be impacted right away? most of what i'm reading today indicates it's just a bunch of

political rhetoric at least in the short term, and no change in consumer prices? >> the people who are saying that have not read the plan. i have. and what i'm telling you is that the fcc explicitly opens the door to billions of dollars in new fees and taxes on broad band by subjecting it the telephone style taxes. more over. fcc brushes away concern from smaller competitors who are subject to other taxes state property taxes, general receipts taxes and the like. but most importantly, i think the critical question of competition. the fcc, there's nothing in this plan that spurs greater competition. as a guest on your show recently put it when asked, isn't it expensive to build these broadband pipes through the home? he confessed that was, quote, outside of my area of expertise. that is rhetoric i think that we should be concerned about. >> commissioner, isn't the provision of broadband a very high margin business? i mean how much profits do these companies make at the moment?

>> well whether or not it's high margin or not, indisputable point is that it is hard to build these networks out especially in part of the country like rural america where you don't see an easy business case for doing it. my point is i want to have multiple competitors in all of the markets. and you're not going to have that if we first squeeze out the smaller competitors. and then on the larger ones micromanage how they interconnect with providers, what kind of services plans they're allowed to offer. that kind of vague yet broad regulation from the fcc takes us exactly in the opposite diction in terms of competition. >> the elephant in the room our own parent company wants to take over time warner cable in a $45 billion deal. there is suggestion amongst some that, as a result of this perhaps that merger is more likely to go through it gives the political cover for that given you have a broad-based regulation. i think brian roberts was even asked phone the conference call on tuesday whether le would be willing to sign a waiver not to

challenge it in court if the time warner deal would go through. what's your view? >> unfortunately because that matter's pending before the commission and i will be called upon at some point to vote on it i can't comment on either the merits of the proceeding or how the fcc's decision on net neutrality might affect it i'm sorry. >> a lot of discussion about the president's youtube video urging the chairman to be aggressive. obviously, chairman chaffetz yesterday saying didn't show us the plan didn't testify in front of congress. is that all just noise or can that be used later on in determining the legality of this rule? >> two different points. first i have been criticized by calling this president obama's plan to regulate the internet. it's telling that the white house and committee touting the fcc's action to implement president obama's plan. second point it's critical for people to remember the fcc historically has been an independent agency and when it's rendering judgment on industries as important to the american economy as the internet, it's --

we should be focused on the law and the facts in the record not and on what a political act, acting through political motivations might want us to done that's the most unfortunate thing about the debate. instead of talking about how consumer access lawful content of their choice we've been sucked into the vortex of political, that have not played a part in the fcc decision making. >> we're waiting to see the order. you are familiar with it. mentioned, you know what's in it. can you give us more sense here when you refer to potential for taxes and fees is that something that's going to happen immediately or is it something simply that could happen as a result of the regulation that's taking place? >> it will happen. the only question is when. in the short term the fcc tees up in position of universal service taxes on broadband. we're expected to get a recommendation april 7th of 2015 on how to impose those taxes.

the fcc says in this order, on net neutrality it might move that deadline back by a short period. so i would expect at some point in the late spring or fall for the fcc to receive that recommendation and then given its desire to spend a lot of the universal service fund money on things such as lifeline for broadband and the e-rate program we'll will be imposing those taxes in short order. some other taxes imposed in the short term such as state and local property taxes, on communication providers will kick in. example, d.c. the, the washington, d.c. area taxes telecommunications companies 11% on gross receipts. now, currently some companies haven't been classified as telecom companies don't have to pay that tax. that 11% tackx on gross receipts should kick in quickly. ultimately that's going to be pass on to consumers. >> yesterday, bloomberg got steve wozniak on camera what's your reaction to the ruling in

he said sometimes the people win what happen do you say to him? >> i deeply admire the work he's done. i told him yesterday, dating back to the apple 2.est, the question is what will these rules do for the american people? and i think, by and large, what you've seen is a great deal of advocacy from people who haven't really expressed that opinion based on the facts that are in the record. how the rules will affect broadband competition. i don't doubt 4 million people weighed in with the fcc but a lot haven't explained how these rules are going to create more competition, make more a better consumer experience and people like mark cuban and others who understand this business have made cogent arguments on the other side. >> even the website went down after all of that. good to have you with us. >> ajit pai in washington. let's bring in steve liesman, some headlines crossing

from dudley this morning. steve? >> carl good morning. i'm at the university of chicago booth schools us monetary policy conference, in new york every year. and bill dudley new york fed president, speaking and commenting on a paper with implications from monetary policy low interest rates in the u.s. partly reflect low rates in europe and japan. and this is sort of interesting, he says if low rates persist, when the fed starts hiking rates, then the fed may have to be more aggressive than otherwise it would be. it's to say what the paper's about as to whether or not the u.s. sensitive period of stagnation, when interest rates remain low for a long time. but he sees real gdp lower over the medium term. the fed, long-run fed funds rate 3.5%. i want to show you exactly what dudley said about this being more aggressive. he said if low short-term

rates, quote, persist even after the fomc begins to raise short-term interest rates it would be appropriate to choose a more aggressive path of monetary policy. a lot depending how the markets reashth to the first interest rate increases by the fomc. quick look at gdp. the number revised down 2.2% from 2.6. but the internals are okay. consumption remained a strong 4.2%. business investment revised up. equipment up. the downward adjustment to the inventory number, that means less of the inventory to work off, 25 billion or so less. this question outlet for interest rates, outlook for fed policy and the outlook for growth part of the interview i have coming up with stan fischer, 3:15 p.m. this afternoon. >> i'm excited for that steve liesman. don't get to hear from stan too often. the maestro of monetary

economics. we'll look forward to that later on. >> i wouldn't call him -- sara i wouldn't use that term because the last time somebody was called maestro, it didn't work out too good. >> the great adult. that was his nickname. >> that works. >> that works. retail now. tale of two turnarounds, different paths here. jcpenney missing estimates, while gap beat. both companies detailing path to profitability for investors on conference calls yesterday. courtney reagan joins us with details. the theme here is challenging environment for retail. >> definitely. retail in general going through major industry shifts with the integration of technology and the increasingly mobile 24/7 shopper. retailers are going through transformation of their own. for the past three years jcpenney has been going through transformation in two distinct stages. under two very different ceos. shares fell more than 60% from ron johnson's transformation to his last day. shares shed another 40% since

oldman has taken over. same-store sales are positive and liquidity re-established. man why believe it will never see $32 billion again. jcpenney reported break even earnings with comps up 4.4%. gap ink has been going through a transformation for more than a decade. buying and now selling. acquiring intermission and expanding its brands around the club. art pack former head of digital for the company, is in his first three weeks as ceo of the specialty retailer succeeding glenn murphy who is credited with gap's resurgence. shares gained more than 140% under murphy's 7 1/2 years at the helm. gotten rid of the director role of the namesake complain. the banana republic's held the first fashion week. it did issue conservative full-year guidance citing fx

and poor issues as potential negative drags. >> that port strike hit. courtney, thank you. straight ahead, just as news comes that carl icahn lost money, his own money, for the first time since 2008 jim stewart explains why so many hedge funds are still popular with investors, despite their underperformance. we'll be right back. e financial noise financial noise financial noise financial noise

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hi everybody.

here's your cnbc news update. germany's parliament has overwhelmingly approved the four-month extension of greece's financial bailout. greece was granted the extension by its european partners and creditors in exchange for a commitment to budget reforms. the u.s. economy slowed more sharply in the final three months of the year than initial estimates. the commerce department says gdp grew at an annual pace of 2.2% weaker than the 2.6% originally estimated. carl icahn's investment portfolio posted its first annual loss since 2008. icahn enter prices swung to a loss from a profit of 1.03 billion the year before. a sad story to report to you. contrarian investor irving conn known for making money in the 1929 crash by shorting stocks died at ripe old age of 109. up to the end he was the chairman of kahn brothers group

which has a billion under management. a guest on cnbc over the years and he'll be sadly missed. >> thank you very much sue herera a moment to look what's happening in the markets. the dow was down 30 points. data at the top of the hour better consumer confidence. dow down eight. s&p 500 in the positive. a very strong one on a percentage basis. the best for the dow and the s&p since back in 2011. as sue mentioned, billionaire hedge fund investor carl icahn who has outperformed the majority of hedge fund managers posted its first loss since the 2008 crisis. pulitzer prize winning columnist jim stewart wonders why hedge funds are popular with investors despite their poor performance. jim stewart joins us explain. we thought calpers pulling

out -- >> another year of let's face it, bad returns, barely 3% there is over 3 trillion in hedge funds. i just have been asking around like people who are investing, why are you still putting money in these things? >> what have you fine. >> the same song we've heard throughout history, which is we will deliver, higher returns at lower risk. i've heard that sales pitch dressed up i mean i remember the junk bond year that was junk bonds. there's a market you know incorrect here it's not priced correctly, we'll give you better returns at lower risk. guess what? ultimately, you know decades went by. they didn't deliver better returns with lower risk. i think that one thing investors should realize there's never higher returns without higher risk. yet, the appeal -- with the fresh memories of the financial crisis every pension fund adviser i spoke to mentioned the financial crisis we can't go

through that again. what i found interesting ten-year data's now out and if you're in the 60/40 blend index fun thing over ten years which expands the financial crisis you come out a full percentage point ahead annualized. if you could have ridden it through. >> i wonder how much is lower interest rate environment, central banks are easing and negative rates in some parts of the world attracting money to hedge funds that are promising higher rate but was helping main index funds outperform. >> i have to hand it to the hedge fund great at marketing and their story changes with every twist in the facts. some said, we're treating it as fixed income alternative. our benchmark is what you can earn on ten year treasuries, 0.1, they said we're outperforming the benchmark, we earned 2% last year. strictly looking at fixed income alternative it does make some sense. i'm not completely against hedge

funds. now the market, i can see a case putting some in now but not before. but on the other hand you have to realize, that's a form of market timing betting regular markets will go down and no one has cracked that mystery either. >> you've hit it on successful hedge funds, and i argue there's two ways to measure it but success in terms of the hedge fund managing make an enormous amount of compensation is not based on the performance of the fund but as much based on their ability to market. and it does seem that once they attract the capital, they want to take less risk in some ways to simply keep it because they don't get penalized. i watched the industry grow up like you have and it's amazing to me how performance has not been strong but yet assets don't leave. >> i know, astonishing to me. i wonder how many years before these people wake up and realize the money they've left behind annualized. >> what part of wall street was a marry tocke merit tock kra si?

>> they want to be measured in that way. you would think the idea is those who outperform will get more of the assets and those who don't will lose them but i'm not sure that takes place in hedge funds. >> the pitch is managers we live by the sword, we die by the sword, we only take a percentage of the gains they do take a percentage, but big percentage. when there are losses they are terrible losses and in many chases though close. >> the number that have closed shop doesn't that say something. >> a record number of 2014 of closures. the average they try to adjust but they don't get the data because people who shut down don't turn in returns. >> can i pick up the point you made about the ability to short, to perform well if there's a crisis. if we looked at 20-year chart of the s&p, the most remarkable thing is we're at the end of the very long bull run for six years, maybe we don't quite remember how bad it was. maybe those people just simply want the different voices within the spectrum they want to hear

the contrarian voice because before would have been locked into managers who say, as we hear often on the network, by the market maybe they need that to be part of the voice that they listen to? >> that's true. diversification is part of the argument. but diversification to what end, i think, what you've got toask. does it lead to better risk adjusted returns? we're seeing data that says no. they're saying what about a 60/40 blend? they say there's enough diversification with plain old fixed income and equities to get you through these periods. you can also spend based on average returns over four quarts or a couple of years. you smooth out some of the volatility. there are ways of dealing with that in the old fashioned low cost mix. >> i wonder if this fair to paint one hedge fund with one broad brush. the long short equities -- >> guess what?

they got over 40 billion of new money. the pension fund managers and advisers typically chase returns just like individual investors. now they're stampeding into event driven running away from long/short equity which has underperformed for years. if you go to hedge fund long short equity would be the place to go. >> event driven largely activists. many closers are smaller funds that fail to attract enough capitol make it work. and the money stays with big guy whose put up pedestrian returns. >> going back to your point, once you get really big, the key part of the compensation is no longer the 20% or whatever it is of gains, it's that chunk of assets under management. so you don't mind mediocre performance, you take lower risk, lower returns to keep that asset base in there. if you can hoover in the 2% 3% 4% say i beat my benchmark of whatever low number, the

institutional money stays and you rake in the percentage. i have to say, it's a great business. >> capital management. >> it's better than journalism i have to say. >> carried interest tax rates a column i think you may have done. >> if not, i should get back to it. >> look forward to reading comments. jim stewart. walmart raising wages as you know for its workers last week. ralph nader, longtime critic of the retail giant, says it's still not enough. nader will join us live within we come right back. but the m-class scans for danger... ...corrects for lane drifting... ...and if necessary, it will even brake all by itself. it is a luxury suv engineered to get you there and back safely. for tomorrow is another fight. the 2015 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.

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walmart's move to raise wages bringing the minimum wage talks center stage and leading other retailers like t.j. maxx to follow suit. we talked to doug mcmillon about the wage there we between provide a great customer experience. the changes that we're making include structural changes in the stores wage increases,

training programs and this company, as you probably know has always been a people business, it's a people business today and it will be tomorrow. so our associates their pride in the company the ownership that they take those things are vital to running a good retail business. and today we're investing in them and we want them to know how important they are. >> some call the move significanting but consumer advocate ralph nader says it's not enough. the author of "unstoppable the emerging left/right alliance to dismantle the corporate state." good morning. >> good morning. >> are you saying it's not enough? if you are, why you looking a gift horse in the mouth? it. >> not enough. walmart workers in 1968 were making more in inflation adjust adjusted buying power than they're making today. if the inflation adjustment was made starting with 1968 the walmart minimum wage, by law, would be $11 an hour. going to $9 next month and then

$10 next year still doesn't equate to what walmart workers made back in 1968. even though worker productivity in walmart has almost doubled because of automation and other streamlining. >> yellen was asked about this the percentage of gdp going to capital as opposed to labor, i mean the chart is unbelievable to look at. why is walmart the problem? why is this move at least not a start in the right direction? >> well obviously it's a start in the right direction but you see walmart was racing trying to race ahead of city and state minimum wage increases. people back home not waiting for washington which has been stuck with $7.25 per hour minimum wage for years. and so what walmart really said to itself is you know we got cities like san francisco and seattle and states going up to 9, 9.50, 11 an hour we better get ahead of the curve though we

have not urged congress to raise it for all 30 million americans. 30 million american workers making less today than 1968 in purchasing power. so i don't think it was much of a big step but it shows that walmart is feeling the heat. costco, for example, started its workers at 11.50 an hour plus benefits. that was two years ago. so i think walmart is feeling the heat. and the heat has to pervade the u.s. congress. so we get consumer demand up. there's no better way to recover from a recession than to give low income people more money to put bread on the table. >> isn't that a small part of it, ralph? isn't that overarching theme the loss of middle class jobs in the country, the fact there has been a steady demand for jobs in retail and restaurants, where those higher quality, higher paying manufacturing jobs are just not what they used to be and this is more of a secular shift in the u.s. economy? >> unfortunately, that's true.

while manufacturing jobs are subject to two tier like in the auto industry where a new autoworker can start as low as $13 an hour half of what originally was the case not only that but a lot of manufacturing jobs are going offshore because of nafta and the trade agreements and this notorious one, which i don't think will get to congress because of the left/right coalition against fast track when president obama takes the trans-pacific agreement and sends it to congress. by the way the minimum wage thing is attracting left/right support, mitt romney's come out for it rick santorum has come out for it bill o'reilly come out for higher minimum wage. the theorists, conservative theorist runs entrepreneur in california made a great case for it. that's why i think it's going to go through congress regardless of whether john boehner and mcconing like it or not, it's going to be a big issue for the

2016 presidentingal election. shame on us for the worker who sweat it every day, growing our crops, don't have a bare minimum to sustain a decent standard of living for their families. >> what do you make of the president's recent pronouncement on this the rich should be taxed more and there should be wealth transfers to the middle class? many people suggest that's really not a long-term solution what happen do what do you think? it's a restoration. in other words 19 0s the rich were taxed more corporations taxed more we had extremely low unemployment rate, we had a prosperous economy and we've got to get back to that level. you have supper rich people making low tax rates. warren buffett admitting his rate is lower than that of his secretary. the big corporations and

globalization have found tax haven as broad tax escapes, places like luxembourg and ireland notorious escape from taxes while they depend on u.s. public services and u.s. protection which are not willing to fully pay for. general electric, i'm sorry to say, one of most successful tax escapees over the years in american corporate history. >> you criticize walmart, and not fair but viewers ask, how many jobs has ralph nader created. >> i've created hundreds of jobs in the civic arena, over 100 groups going door-to-door canvassing for clean water, clean air, workers safety. yeah i've got to answer that question. the head of walmart has got to ask himself, his predecessor was making $11,000 an hour plus benefits and i'm sure he's not making much less than his

predecessor. that's a pretty big gap between a million walmart workers making under $10 an hour. we have all of this information on our website timeforarace.org. it's a left/right issue now. >> arguably free markets catching up. we'll see, ralph. always good to talk to you. thanks for the time. >> thank you. >> all of -- in the markets, we're about 14 points away from the nasdaq hitting 5000. bringing back memories of course for many people of the dotcom bubble. we were there 15 years ago. will it be different this time? former yahoo! coo will join us live here at post 9 to weigh in when we come back. so what's going on today? news alert! message! email! calendar update! most of us admit to being overwhelmed by information at work.

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as the nasdaq tps continues its march towards 5,000 what's the best indicator on the crucial question of whether we're in a bubble? dan rosensweig is the ceo of check and joins us this morning. >> good morning. >> 15 years ago i think you were

still at pc mag. you hadn't got to yahoo! >> there's no more pc magazine only on-line. computer magazines at the forefront and it became obvious around 1996 when we met the yahoo! guys. >> of course. and the alibaba deal. whas the difference between now and then in your view? >> of the market? >> valuations yes. >> i think what we've seen is a separation of winners and losers. the private market which i don't think you can overlay to the public markets, but scale matters. everything in the internet that is public is scale. if you're not -- if you're the windshield or the bug. there are companies that have breakaway velocity like the facebooks and googles and amazons and then companies like ours which are picking huge verticals and becoming the leading player in that vertical and then we want to see the same kind of ride over the next 10 or 15 years. you have to be in a big category, a platform you have to have a form of modernization and you have to be pure digital because that's where all the

profits come from. >> you've gone pure digital, your story is phenomenal a great jump and the stock is you did what you describe as a netflix. talk us through that briefly. it's textbooks you rent essentially. >> in essence we re-ipoed the company. what we've been looking towards is how do you get out of the business you don't want to be in because that business eventually was going to go away. we know print is going to go away eventually. >> physical books. >> physical print textbooks we rented. what we've been a able to do is do a deal with engram and they are the largest distributor in the world of physical goods and starting to be digital goods and they are going to buy the books own the books, we're going to market and distribute it. we keep all the customers, get all the data the transactionses, and we move from a 10% gross margin business to a 55 gross margin business at the same time we've leveraged that to be our other digital businesses -- >> i guess the problem will be

barnes & noble copied the business years ago now. if you go purely digital other entrants can come in and erode those margins. >> only on the e-textbook side. they can't erode the margins because it's an agency model, the price set by the publicer. the majority of our revenue now is something other than textbook related. it's not a print textbook where we take a 20% commission and get my margins or e-textbooks, homework help product, tutoring product, college admission products the ones driving over 70% gross margins. look at the growth rate the whole business now has changed. high growth high margin business trillion dollar category. a whole new company financially which now meets what we've been doing on-line for students. >> those are -- sorry, go ahead. >> i was going to ask you about a comment you made earlier about the private market being different than the public market. is that where the bubble is these days in the private valuations of these companies? >> you hear about the high valuation companies. you don't hear about the thousands of companies that are

not getting those valuations. you probably get the argument there isn't a bubble because most companies don't get that. when you hear about airbnb or uber it's because when you see their financials you can see them earn their way into it as a public company. but most companies aren't getting that or the few that are, are ones people expect google or facebook or apple, to buy, right? you're actually not going to get monetization from instagram before it sells. i think -- i think there's not as big a bubble as people think, but i do think that in the public market there's no bubble when you look at what apple is trading at. all those corrections seemed to have happened. salesforce's number first company to $5 billion, first company to $6 billion and, you know benioff is a great marketer but the numbers are there. >> i remember being in the parking lot of facebook with you the day of the ipo. 38 was the number then. today it's 80. you don't think that -- you

wouldn't ring the register on some of these. >> there's a difference between trading and what the companies can be worth for real investors three, four five years from now. facebook continues to grow. he makes smart decisions in terms of what he buys right. what is instagram really worth now? right? what will whatsapp be worth when it becomes a payment model. it's a big bet. like alibaba is a big bet, but there's always seems to be over a long period of time a separation between the big players and small players and the big players the value accrues to them over time. i can't tell you what it's worth today. that's not what i do. >> it's been a phenomenal 15 years. that's for sure. >> quite a change. >> unbelievable. good to see you, dan. >> good to see you. >> that's a good segway to go to jon fortt with a look at what's coming up next on "squawk alley." >> good morning. we've got bill gurleys the vc from benchmark to talk about valuations and more. more details on the apple watch, how long that battery will last and finally "house of cards" is out.

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quarters in loss guys to, california 11:00 a.m. here on wall street when i said "squawk alley" is live. ♪ ♪ ♪ we had fun with that. welcome to "squawk alley" on a friday. joining us jon steinberg ceo of the daily mail north america, jon fortt and kayla tausche with us as well.