million barrels that we've seen going into storage since november re-enters the refinery supply market. >> reporter: more supply wti prices could fall and according to some fall dra mastically $20, $30 a barrel more in the short term. back to you. >> morgan thank you. becky, it was broken arrow. >> broken arrow. >> got time join us tomorrow. "squawk on the street" is next. ♪ >> good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at new york stock exchange. premark weak again after the worst day for stocks since january. downgrade of alcoa today adding to sentiment. the european economy shows signs of improving. oil managing to hang on to a level above 50 at 50.6. the ten-year remains around 209,

210. road map begins with the markets. investors facing this continuing pullback, after the nasdaq broke 5000 earlier in the week. private sector employment data not helping, days ahead of friday's jobs number. >> everything must go. target aiming for billions in cost cuts while abercrombie shares get discounted on mixed quarterly results. >> pressure mounting on ge's ceo jeff imle. we'll explain why that's in the news. stocks pulling bakken on track for a second straight lower open adp employment below forecast 212,000 workers added to payrolls in february. that's ahead of the jobs number friday. and after some of the mixed data out of europe and china overnight as well as surprise rate cut from india's central bank, the second cut there of the year. eurozone, jim, you said yesterday the green chutes are no longer green chutes they're outright plants and the pmi number, even in france would back that up. >> persistent low growth there. i hate the term negative growth. but things are going down there

very low single digit. now things are going up there 1% to 2% except germany which is booming. the euro, they've debased it enough that helped for exports and gasoline really helps them. it's trickling through. we need. february's a weak month in the country. february was a weak month. and we have a very big fed meeting coming up. we have had a lot of complacency going into the fed meeting. if janet yellen decides i'm not looking at february i'm taking it wholistically, a rate rise will not sit well. >> yellen did talk in new york city, what amounted to a scolding of theing about banks. take a listen to this. >> you expect the firms we oversee to follow the law and operate in an ethical manner. too often in recent years bankers at large institutions

have not done so. sometimes brazenly. these incidents, both individually and in their totality, raise legitimate questions of whether there may be pervasive shortcomings in the values of large financial firms that might undermine their safety and soundness. >> pervasive shortcomings. >> that was very tough. look, when you wake up let's me ask you a question what market wasn't rigged? >> that's the thing. like libor, mortgage and mortgage securities. >> gold. >> gold. and then some of the foreign banks in terms of what they've done to hide money. >> yeah. >> launder money. >> i mean, these are, you know we all kept waiting, like wells fargo not that much implicated but for somebody to go to jail. when you rig things few you were to rig airline prices anything involving, let's say,

liner board, where people have gone to jail you expect jail terms. but here it is pervasive. that's right. there's a big sea change going on in the country. a college president, sport kids are not going to wall street. >> business grad stanford business. no it's much more entrepreneurial, going to start start-up as opposed to bank. >> there's a recognition that your kids are not going to be proud if you go to these places. >> i think goldman sachs is getting its fair share of smart people. >> goldman people. i was looking at resumes. yes, people will say, i worked at goldman. but i'm saying in general, we're not getting -- these have become gloomy places to work. it's not unusual to see a guy lose his job. the only guy i remember that lost his job was the head of bankers trust because they rigged some proctor & gamble trade. now, it's like you expect. lloyd blankfein's got senior

tenure tenure. mike corbett, came in after pandit. the same guy running them for years. it doesn't last. warren buffett did i mean warren buffett's letter said these guys are shiesters. >> he goes -- he does go after bankers oftentimes. >> but not byron trotto nice man. >> people say he's trying to make sure he always gets the best deal possible. >> i think -- >> yellen. >> fair point, everything he makes. yellen, important. >> ratcheted up to that level. >> to the markets, should people have sold at nasdaq 5k? >> no no what's going to happen we've got -- when you see endless headlines, nasdaq 5k and you recognize we're in this kind of void period. almost no real earnings now. things are -- the weather was so bad. we're starting to think, did we chase the stocks when we going to get february comp numbers and they're not that good. we're saying we got up here what can we do now?

and we need something. we can just keep paying up for the same earnings. it doesn't work like that. >> target might be giving some people some reasons. detailing its plans to cut costs, eliminate thousands of jobs. the company plans to cut $2 billion in costs over 2 years. and abercrombie, out with mixed resultsing missing on the top line. retailer citing fx headwinds. first call without mike jeffries. >> they don't have -- minus 10%. target, i didn't know this 13,000 employees at headquarters, which is what, 12,900 more than warren buffett. >> 25 or something. >> one picture of everybody in his headquarters. i'd like to see that headquarter picture of everyone. >> john malone similarly had something like that. >> brian cornell, you think $2 billion, you're not going to have 13,000 people in headquarters. brian cornell, i thought, very

strong yesterday. and natural foods really looking good. >> sole ofmaller stores. citi target. >> the notion that you have you a target next to every single university because the first thing you do when you go like i've had to do go to boston you go to new orleans, okay let's go to the targets. give me that target next to the barnes & noble. believe me he's thinking of doing just that. he is a smart man. he's listening to everyone to try to get it right. listening to my friend at hanes celestial. what can i do in? i like the guy. >> i understand. >> he's listening to people. that's not the target -- not become the target way. it was under mr. mackey he was the dominant retailer of his generation. i like what i'm hearing from cornell, he's strong. >> yesterday we talked about goldman cutting specialty retail. last year morgan stanley took

a&f to underweight. europe two-year comp down 25. u.s. down 14 over 2 years. >> they could use ron johnson. >> who? >> the running back for the giants. >> i'm telling you that that's a combination. you need someone so bad to recognize that this -- no they have -- they have real problems. and ron -- i don't mean that he's a great guy, everybody loves him. i threw that in i'm trying to be a nice guy lately. aeo turnaround shows, american eagle, ever shopped for -- >> no no. >> -- flip-flops. look for flip-flops at american eagle. i like to shop for flip-flops. the flip-flops are like 20 bucks. american eagle has better flip-flops. >> they do? >> great flip-flops. >> that's what they're going to build the empire on flip-flops. >> rome wasn't built in a day. >> ron johnson. >> the man who jcpenney still

blaming him. ten years from now, nothing we can do, he wreck the home center. they got out of the joe stuff. >> what was joe? >> right. >> joe fresh. >> joe fresh. what was that? a coffee bran? >> new york i don'tno i don't think so. >> don't blame my predecessor, blame me. that's jeff imle. a long time since jack welsh. the journal on its front page "jeff imle impeded by falling oil prices," following a critical column yesterday. quote, the prospects of oil's denting ge's earnings has compounded the view of some on wall street and mr. immelt wasn't moving fast enough to remake ge's portfolio even before crude prices fell. when we spoke to him in december, right here on "squawk on the street." >> multibusiness company, i would say, in some ways this is

the strength of the company. so, we are going to give guidance that's up let's say, 10 to 20 cents next year. so it's very strong. 10% plus growth next year. even with the tougher oil and gasp we run these businesses through cycles for the long term. you're not going to have all of the business at peak of the cycle all of the time. >> issues we have revisited a number of times, discussed with mr. immelt in person but two days in a row "the journal," quite a platform decides to put this out there. and in fact has a chart detailing where they bought where they sold where they bought where they sold. something you raised of course many times with him in terms of oil and gas, given they were buying when it was 100. >> sold appliance at the bottom of the cycle. >> tried to sell appliances for

a long time. >> yes. it came back. >> you could even argue nbc universal would be worth a good deal more now. >> oil did go down. let me ask you a question, david. >> yes, sir. >> later on in the day, massive denials from everybody. where are these stories coming from? does someone say i'll do a hatchet job of jeff immelt? >> nick heyman has been a thorn in their side for 20 years. >> yes. >> there's no one reason to do that. we discuss it as well because passage of time performance of the stock, notably absent from so much of the rally that is taking place in the s&p or the nasdaq. there is no one time. and i do think it's interesting, on the activist front you have to wonder whether -- they have to be thinking about that have thought about it quoted in both stories, as one shareholder. but you know what? microsoft, dupont, we've been making for some time activists don't want to focus on companies that are going to require a great deal of work and/or the

breakup scenario some argue not result in a higher stock price. >> i was with david cody from honey well they have -- they show you exactly where technology fits in how you couldn't do the company without it. you really couldn't. we all accept that ge could do the company in many different pieces. i think the acquisition, paved over still eu issues you have to hire in europe you have to say i'm hiring in europe. now a double down on energy looking at their contract book. now they'll be defensive about these issues. >> they will be. argument may be we would not get a higher multiple if they were independent businesses but some argue you would have greater focus, you hear this all the time shrink to grow argument made by companies. >> right. >> you'll have greater focus and do a greater job. those people there will be incentivized because of the performance of the business as opposed to something they can't control. who knows? arguments can come from both

sides. a prominent -- the prominent business publication decided to put it on its front page. >> mr. immelt said we do better with $100 oil. knit half. made two big acquisitions in oil. one related. you have to say, timing was bad. >> 356 the dividend yield, not too pad. >> i think about what he said who's returned 40 billion to shareholders, this guy, remember that? >> it's a hatchet job. i don't see -- based on nothing. they're based on nothing. >> at least we lesharn when he has stress he listens to marshal tucker and the almond brothers. >> i always liked marshal tucker. synchrony, that was fabulous. there you go. >> when we come back is the sentiment beginning to turn on mcdonald's in a good way. >> two new notes out as the company holds a meeting with franchisees in las vegas. a rough 2015 for alibaba. one analyst's take on what's

ailing that stock. the premark, our first triple-digit loss for the dow since january. six triple digit moves in february all to the upside. more "squawk on the street."

mcdonald's holding a meeting with franchisees in las vegas as new ceo steve easterbrook attempts to turn around company sales. two new notes out. rbc upgrading to outperform,

take target from 3993 to 115. janney say business in the second half of february meaningfully worse than prior assumptions. we can take the rbc note first, comps going positive by year-end on menu rationalization, regionalization but also the crises ending in china, japan, russia. >> wow, russia. great for world peace. >> great for a lot of things. >> look i think the stock held -- i was talking to my friend stephanie link -- the stock held 89 a champ, because of the yield. up here it gets grazed on a bender. take a look at yum, when you hear china's turning, japan's turning, people get excited because the aggregate comp number will be good. this is a fresh face. the menu's too difficult. winning back the franchisees -- >> first day of work last sunday. >> franchisees like him. >> i have no doubt, no reason to

not believe you. >> i've had popeye's on dine equity on, when you talk with them, off the scene, how are the franchisee's? that's who you have to apiece. you have to appease. >> people laugh at the upgrade, where were they at 91 90? >> i liked them at 91 sole at 95 for the trust, what am i? look, we all know and you know better than anyone they have it within themselves to be kings again. but do they have the dna of natural organic or just go full-out like the commercials, full-out saying treat yourself to some cholesterol. go like, you know have -- >> plenty of success stories that have nothing to do with organic and natural. the guy from sonic, doing fine. >> wendy's doing fantastically. burger king, terrific. >> yeah. >> last i looked nothing fat-free on the menu. >> right. look chipotle's 1,000 calories.

mcdonald's has it within to get better. but got to make that menu easier to work there without a ph.d. >> getting sg&a down that's what it is about. >> like you don't -- shouldn't have to be a rhodes scholar to work at mcdonald's. it's too hard. look at the men u. it's really hard. >> true. meanwhile, the weinstein company of all folks and film nation are buying rights to the story of the founder, ray crock, according to "the l.a. times," the tone of the script described akin to the social network and there will be blood. >> what? >> who knows if mcdonald's is behind that. >> drink it with a straw. remember, talked about that. straw, cooca-cola? >> michael keaton attached to the script. >> ray crock, i would not have gone there either one of those. >> look. >> right. >> you know golden arches. >> directors can take their -- take it wherever they'd like to

go i suppose. great story. >> wow. you know whatever. >> get those bathrooms clean, i'm back. you know what one right off -- >> they -- the managers owners. >> clean the bathroom. i'm bigger than ever mcdonald's. >> we'll get cramer's "mad dash," count down to the opening bell. a look at the premarket on wednesday with adp coming in line. more "squawk on the street" in a minute.

♪

. all right. time for "mad dash" on this wednesday. it's wednesday. like to remember what day it is. >> hump day. >> hump day. >> mike mike mike. talk amazon. they don't run that. >> no they have a new one. right here shorts said forget it don't buy, don't buy. baird comes out with a note today, which is the one that takes this to the level where the technicians are going to say, buy, buy, buy, and that is a note where they raise price target, a lot of people are talking, you know there's business better than anyone talking about what we're going to see when the web service breakout occurs. people feel you're going to see earnings power that could be down the road. >> right. right. you know ideas they operate amazon web services at a fairly low margin. >> yeah. >> talk to customers, they are always talking about how amazon's coming back with a lower price a lower price some you -- you know you wonder what

that will look like. >> right. >> because right now it is as you point out, the other column. >> right. >> all of the analysts like so many things we don't know how many plan memberships there respect amazon doesn't give you as much as you would like if you're an analyst trying to figure out where to put your estimate. >> if you're short, you're say identifying hate this guy from baird. sorry, a good these tishis and the stock's going to go higher. we're in a tipped market. the reason i like the call because people were shut in from the weather. what do you do? you watch netflix and you shop amazon. that's what people do. >> right. >> that's what they do with their time. call of warfare duty evolve. >> right. >> one hand killing people on their pc. second ordering on their pc. third, watching "house of cards" on pc. that's our society in a nutshell when it cold out. >> yes. i've been doing a lot of some of those things. prime membership, a lot of elasticity in the price, could go higher.

>> i'm thinking of taking up knitting. >> really. >> something more productive. >> i would like to be more productive. i was talking about that. tv, you stay right there. we're coming back with more information. information service is what we are. back after this. my name is tony sartorio. i'm a lineman for pg&e out of the concord service center. i have lived here pretty much my whole life. i have been married for twelve years. i have 3 kids. i love living here and i love working in my hometown. at pg&e we are always working to upgrade reliability to meet the demands of the customers. i'm there to do the safest job possible - not only for them, but everybody, myself included that lives in the community. i'm very proud to do the work that i do and say that i am a lineman for pg&e because it's my hometown. it's a rewarding feeling.

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cnbc "squawk on the street." live from the financial capital of the world. we'll get the opening bell in two minutes. a lot going on. india cutting rates, poland cutting rates, china cuts overnight lending rate jim. >> india still to want. this is a developing story. you've got brazil doing terrible russia forget about it. you have china on the declean of growth. and then you have india, which is a big upswing. i've got to tell you, i'm trying to find more and more india plays, very difficult, very difficult. >> the dollar, which we haven't, extending its gains against all of the majors hitting fresh highs, not all-time highs, but fresh highs, whether it's the euro, the pound, even the swiss franc.

>> yeah. time to travel abroad. >> yeah. >> otherwise you are getting hit by it if you own stock. >> but it also begs the question, ibm, a big headwind, hewlett-packard, we know. >> technology microsoft intel. >> microsoft intel. look at cash numbers of the money that some of the companies hole overseas in cash you also wonder, well -- >> speaking of microsoft, 82 billion every seas 90% of total cash. a lot of the numbers out this morning from jpmorgan. ge oracle google of course number one, apple. >> microsoft's got to make the numbers. they've got to make the numbers. i think after listening to hewlett-packard and that best buy conference call against tablets wow, the tablet, what happened? what happened to the tablet. >> phones got bigger. >> yeah. >> right. >> six plus what do you need a mini ipad for, though i have one. >> it's like sunset boulevard, right?

>> pictures got smaller. that's a good one, jim. twilight zone yesterday. billy wilder today. opening bell. look at s&p at the. of the screen. here at the big board, green haven funds, green haven coal fund. over at nasdaq bioshares etf celebrating recent listings of two biotech etfs. bob evans, jim, a rough day. huge miss. bad guidance. spin-off canceled. >> it's like keystone cops of activism here. i was thinking that that bob evans, sausage business worth a lot. >> hillshire what we saw happened there. this stock moving up sharply. >> what happened however? >> i don't know. i haven't spoken to him. >> you think you can get off the desk and find out. this is horrible. >> comps are the best in 13 years. >> restaurant business is good.

they took -- they snatched victory, jaws of defeat my friend. >> this is his board, by the way. activist get what they want put board numbers in pursuing a strategy they've advocated and the board says no we're not going to do it. >> that is just one of the great opportunities missed. >> janney's note apocalypse now. >> love that. >> their words, prior bullish th the thesis vaporized. >> best buy is actually the number two gainer here this morning, jim, as people take stock of yesterday's news. >> that was a good -- yesterday the market was down people lost. lost in the shuffle was the cash generation of the company, extraordinary. you know i've got to tell you, this is the thesis retail is better than expected. best buy did a really good job. and i think a lot of people keep thinking, it's the old best buy. we've got to revisit best buy,

as if -- i bought a gopro at best buy. treat it like -- treat it fabulously. got to walk -- when you're not as young as you used to be and you go into a best buy and say how does this stuff work? they have live people who help you. >> they do? >> it's extraordinary. went to get a pc nice pc out in long island there was a plan there who helped me a human, sat me down walked me through it. terrific one right outside the holland tunnel when i bought the gopro. i said how does this work? let me show you. things like i've never seen it. people helping, people working with you. >> it can be hit or miss in some stores. >> remember hit or miss? some chain. i think that best buy, people don't recognize they've turned around and they have service and service with a pleasure. >> shares of alibaba, which we talked about yesterday behind me so i can check, they are down again. talked yesterday about it of

course, trading below its closing price on its first day of trading. and down again, another one plus .3. taking yahoo! with it, giving yahoo! owns 15.4% of alibaba. yahoo's! last earnings report gave us the detailed plan they're going to split off into spinco 100% of the 15.4% stake and do it in a tax efficient manner. but given this stock trades on that stock, they've both been going down. baba, it's nothing in particular, i would argue, it's sort of seemingly a run of news. it started in some ways when the government -- when they got into a little spat very little. >> government i mean look this government is an activist government. the communist party controls everything. we forget they control everything. >> they try. >> well, i just think that they can make a statement and they can really hurt a company's

earnings. remember singles day was the peak. >> yes. >> all down since singles day. we've got to wait for another singles day. year-over-year comparesons. >> 11/11. >> i need a catalyst to say it's time to go back in. you need a catalyst. something has to happen. pick up in the numbers. i don't know but -- >> headlines. >> they could have a very good quarter that would happen. listen, they reported a quarter last time that would -- is extraordinary on the growth rates but of course given multiple on the stock not enough to sustain it. now down from 120 to 80. >> but the party doesn't seem to want people to party like it's 201999 -- the party. a party pooper. they are. not kidding. take a look at things that come out of the party. they are not encouraging consumption. this is something that the party's gotten religion.

>> they're not -- they're not perhaps trying to consumption on the highest end. >> right. >> some of which was il gotten gains, yes. >> i think there was a lot of corrupt money. i'm saying this -- i -- listen j.d. had a good quarter. it's not like it can't happen. i want to be open mined on alibaba and on ibm. two companies that i'm opening my mind to. >> you are? >> yeah. >> open mind. >> okay. >> alcoa testing support. it's hit a couple of times. now back to 14.5. b of a cuts it to a neutral, target from 20 down to 17. >> the negative is obviously a glut of luminol. a big aluminum maker said there's no glut. alcoa does have this move in the value added with aerospace. >> sure. >> but obviously, it's difficult to fight the trend of a metal going down. people have written off -- it's not been a great thing to do.

i like the acquisition and i do point out that the stock has been one of the best performers. so it's cooling. i don't know. does it go pack to 12? i don't think so. >> shares of shaneer, i don't know if they're open yet, they're going to be down. doing a convert. getting a very nice -- >> 4. 25. >> part of the conversation we had yesterday. in terms of what kind of terms many of the corporations can receive in the fixed income markets or the convert market. >> 2044 piece of paper, 4.24 for a company that hasn't made a lot of money. they want upside at 138 they'll get some stock. >> yeah. >> a piece of paper that shows you yesterday there was a discussion is it bubble licious? this is not a aaa j and j balance sheet. >> we talked about actavis.

all of the paperwork's in on that. 11-year average tenor, 3. 25% what they're paying for that money. of course, in other words -- >> this one? >> actavis. issued $21 billion, the most ever issued by a health care company. second largest bond issuance of all types. >> how big is the company three years ago? little quiz. how big? >> 10 billion. >> had $90 billion. what does it tell you? a company now 72 billion, which is now allergan free money. i sent this idea to david, david said we've got to go run a company. >> you and i. if we can borrow 3. 25. >> would you like to joan us at a company we could raise a billion at 3.5%. >> buffett said your smartest investment is 30-year mortgage and companies are doing equivalent of that. >> i looked the a mortgage i had a conversation i don't want to pay my mortgage down.

>> why? cheap money. >> yeah. it's never going to be this good. i think i can get -- if rates go higher i can get a positive muni, not new jersey but a positive kind of thing going there. that's like williams did this piece of paper, they did 1.25 billion, borrowed 3.6% senior note yield 6.7. nice. >> we were talking about mcdonald's a moment ago. just breaking now, company says it will gradually stop buying chicken raised with antibiotics. we are listening to our consumers. tyson is on board. >> wow. wow. >> make some moves. >> great. >> geez. >> that could mange a lot. >> no i'm not kidding. if tyson -- antibiotics in chicken is a big issue, as you know there mcdonald's may be making -- geez they've got a long way to foe, obviously. >> those poor chickens. >> they are v. to provide the

chickens with wayfair furniture. >> allow them to actually not have breasts that overwhelm them. >> restoration hardware. >> chickens running around the floor here free range. >> all over the headquarters. running around. having a great time. >> man. talk about transparency. >> ends badly, by the way for those guys. >> generally doesn't work out. dow's down 107. mary thompson. good morning. >> carl, those are low of the day for the dow jones industrial average. no surprise futures pointing to lower open on wall street. traders saying the market's looking tired right now as indicated by the low volume we saw in yesterday's session. investors, weighting data points. today the inventory number for oil. later in the day beige book the reading on the regional sectors of the u.s. economy. and then of course the big

number on friday which is the jobs data. what we're seeing early is a broad-based decline. commodities getting a bid but red across the board. transports continuing their slide off 69 points right now. let's attack atake a quick check of the dow components. mcdonald's, it will no longer buy chickens with -- that have been given antibiotics. the company received upgrade to outperform saying it is expecting same-store sales to improve toward year-end for the fast food giant. plagued by weak same-store sales here in the u.s. stock down a quarter of a percent. dupont rejecting a bid by actavis investor nelson peltz to change the way directors are elected. ewanted a universal proxy allowing investors to vote on what activists with the company. the company says no it wants to submit its on slate and then have other people add to the

proxy, if they are allowed. lastly exxon mobil cutting capital expenditures for 2015. not much of a surprise to $34 from $37 billion. the stock lower today. s&l, this company is a provider of industrial fasteners and supplies to manufacturers, including the oil and gas industry. its february sales up 8.6% disappointing. the company said it was hurt by the stronger dollar as well by a decline in sales from oil and gas companies that share's off 2.6%. teen retailers out with results. abercrombie & fitch, its profits in line with expectations sales weaker. gross margins improve. company upbeat about the second part of the year. you can see its stock under pressure. american eagle outfitters stronger than expected results and it's being rewarded with a gain of over 7%. want to talk about a car deal as

well. mastercard becoming the exclusive network for citi branded credit and debit cards around the globe. it did have a deal to do that just for u.s. cards. now it's consolidating its global grip on citi branded cards. citi will be able to strike co-branned deals with other providers like visa as it did with the costco co-branded card citi will be issuing for the retailer. let's take a look at bob evans to see how its stock is doing. slammed in the after-hours trading yesterday after it announced earnings and said it wouldn't be spinning off its food unit. the stock down 20% today. it's certainly one to watch. right now the dow off 124 point. uptick in the vix but not an uptick in the stock market today. david, back to you. >> thanks very much. let's head to the bond pits. rick santelli at the cme group in chicago. >> reporter: well today's wednesday. tomorrow's ecb.

what do we see in the marketplace? look at two day chart of tens continue to compress. compressing to close to the high yield closes of the year. and having said that let's look at everything in the context of the big ecb meeting january 22nd, precursor to what we're going to have tomorrow. and we see some fascinating issues. look at our ten year. see the way we adjusted up higher a couple of weeks after that meeting? we basically adjusted up about 35 basis points unanswered by the next chart, bund yields because they have been compact. you really get to see this when you look at the same date on the spread between the two. our ten-year yields minus bunds. see what happened? bunds have stayed in the 35 basis point range we added 35 basis point to the spread putting it close to 175 from 140, where it was. this is significant. everything priced in.

these charts potentially for higher, not lower rates in the u.s., which is the bias of the market. let's look at the currency. the currency is well compressing, except for unlike the bund almost on cue, breaking below the range, as you can see there. let's look at another currency that has issues regarding rates and that of course the chinese. look at the dollar versus the yuan continues to creep higher. that's the dollar. of course going all the way back to the fall of 2012 this may be a currency to watch. if everybody's looking to build exports, maybe china's the slow sleeping giant that's going to flex itsfx muscles. >> oil a winning month in february, trying to hold on to 50. jackie's at the nymex. >> wti around 50, brent crude around 60. wti is up and brent lower this morning. news yesterday that saudi

arabia's raising prices to asia and the united states. speculation that saudi is trying to show sign that it thinks that demand will improve or trying to spur the price war with the shale players here in the united states. according to reuters, saudi arabia's denying that. uncertainty over a nuclear deal with iran by the end of the month, deadline here looming. traders talking about the comments from the israeli prime minister yesterday to congress and also president obama's response to that. a lot of uncertainty. still very unclear there. 10:30, our inventory data from the department of energy. last night adp a build of 3 million barrels. five-year average is 2 million barrels but traders saying if we see a build it that range we won't get a lot of price action. they want to start to see draw downs to believe we're working through the supply not necessarily going to get that today. but they are watching numbers closely. recall, in the last few weeks we've seen 7 million, 8 million,

9 million builds and that's driving the price of crude down. for now, we're hanging out in this range. when we come back the ceo of fiat weighs in on the apple car. a year after buying oculus facebook looking to up the ante. can mark zuckerberg beat sony? dow's down 140 and not a single component in the green.

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s&p down 15 points. a couple days to go until the big jobs number. another chance to nail the number. tweet us your predictions for february, nonfarm payrolls. lucky winner's going to receive a cnbc laptop case autographed by the "squawk on the street"

gang. nice looking, by our standards, would you agree? i'll give jim the bag and the sharpie. >> we're not allowed? we can't win this ourselves. >> sorry. >> this is nice. right on ebay. >> you have until a minute before the jobs number on friday to tweet us your predictions. best of luck. jim, with the dow off like there is right at those levels that the s&p had on december 29th, 2090, some want to see a support. >> i need -- again, catalyst something good has to happen. we have the employment number friday. a big fed meeting. i did a piece last night about how the volatility index and market have -- market's spiked down ahead of the televised, the long federal reserve meetings. i think this is the etbeginning of that and we're worried. people are afraid she won't calm things down. the angry, mean yellen took it

to the bankers. >> bay ridge you grew up on the streets, you know what i'm saying? >> that was a fiery eating speech. >> back when she was growing up. maybe it was diced with her, gotten bad, gotten very nice. >> i don't want to mess with her. she came down hard on the bankers. that was some speech. >> "stop trading" with jim in a moment. dow down 145. at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping.

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visit comcast.com/wireless to learn more. time for cramer and "stop trading." >> listen this is really important, there's a company, white wave company upgraded today by wave bush. why is this important? target specifically which stock is doing well today, saying we're going natural organic. we had the chicken natural -- this is the sweet spot. this is the company that makes plant-based foods and i'm trying to get people in the stock because it's got the best double digit momentum of anyone in the category. and i think hanes is terrific, too. i have been pushing it. i hope it comes down so people can get in. i've said my peace. whitewave, soy, almond walnut milk, david. you ought to start drinking that

instead of stuff from the cows unless you drink horizon. i like horizon snacks. i like earth bound green salad. >> new year's eve you thought one of the takeouted. >> my favorite. i love their products. try to -- i integrate it into my life. >> chocolate milk never give that up. >> bisquick. >> no i can -- >> nestle make the very best. oser mayer. >> what's on "mad." special guest, i have tom quinlan. take a look at dave cote on china. >> you've been becoming the chinese competitor. you're not benchmarking yourself against the plain old american companies. >> if you can't beat your chinese competitor in china, they're going to kill you if all

of the marks you like today. i spend two days a year going through all of the businesses to see how we're doing at localizing and becoming the chinese competitor. >> i've known david forever. recommended the stock the day he came in i had such faith, many many years. stock's coming in. buy back. dividend better than s&p. most bullish i've ever heard dave, that includes over the fence, he lives flex door. >> home improvement. >> never minded that preprom party. >> got it. >> see you tonight 6:00 p.m. eastern time. when we return breaking news ism services at the top of the hour. plus more on alibaba's recent slide, now the time to get in on that stock? the dow down 138. so what's going on today? news alert! message! email! calendar update! most of us admit to being overwhelmed by information at work. that's why ibm created verse. it uses

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♪ good wednesday morning, welcome back to "squawk on the street." carl quintanilla with sara eisen, simon hobbs, david faber at new york stock exchange. dows down 137. thurn thurn turning out to be the big of the two-day loss since january 27th

and 28th, true for all major averages. oil trying to hang on to 50. >> our road map for the next 60 minutes. alibaba trading near its post ipo lows $60 billion of value destroyed as investors worry about sales number what happen to do with the stock now? a tale of two teen retailers. abercrombie, deep in the red, while american eagle gets a big boost. find out what american eagle is doing right. >> find out why despite falling oil prices storage for crude is nearly running out in the country. >> rick santelli in chicago. getting ism nonmanufacturing. rick? >> well, here we go. 56.9 february read for nonmanufacturing. the service sector the biggest swath, it should be much less affected by the port strike of course, because we're talking services indeed it is. 56.9 blends right into the range. especially when you consider last time was 56.7. high water mark was a while ago.

58.8, that was november. and that comp back to 2005. before we i -- i send it back to you, look at euro versus dollar chart as if on cue with tomorrow's ecb meeting starting to see the down trade as it continues to break out of its recent 2 1/2 week tight range and the comp now goes back to the fall of 2003 and it might fall further pushing that comp further back in time. carl and the gang back to you. >> thank you. cheaper holidays in europe this summer than last 20% down. let's dig deeper into the data. steve liesman back at hq. the event risk over the next 48 hours, not just with ecb meeting tomorrow, beige book this afternoon and the employment report on friday. >> i think that's right. and some question simon, i'm getting from economists whether or not weather plays a factor. i'm not sure it played a factor here. we had a bunch of folks say that

there's positive business activity from oil and others saying that they're seeing lower capital spending from the oil sector. the internals look pretty good. i just had it there. let me call it back up here. i see the employment index bounced back to 55 from a very low reading last month. by the way, a false signal as to weakness. but you have new orders here and the backlog also doing well pointing so positive activity in the month ahead. the adp came out, lower than expected, a touch lower than the estimate. 212 was the number 212,000 jobs in the private sector estimated by adp. january revised up solidly, as the previous year january up by 37,000. good sector doing okay. service sector, powering ahead. nonfarm payroll estimates 240,000. commentary i was talking about barclays saying data suggests

downside risk to their forecast for a strong 250,000. and over the ubs, saying adp tends to be less weather sensitive than the bls payroll figures. the big issue for friday's payroll report how much impact inxlem inxlem inclement weather played a role. it could be january, february was colder in the northeast and the eastern united states than last year if can be believed. sara, the day you've been waiting for the transcripts from 2009. we'll be focusing as you might expect, on that march meeting when they upped qe to the 1.25 trillion number and when we were at the top of the panic in financial markets, sara. >> a lot to go through. i know you're going to be busy reading through that. bring us the highlights. it's exciting. steve liesman. keep ang eyeing eye on the market. digesting economic reports ahead

of friday's jobs numbers. rob san talngelo. what about the data mixed, noisy because of ♪y weather, how does it set us up for jobs day. >> great way to put. mixed data one 0 the underpinnings of the recovery auto sale. the disappointment caught people on their heels. northeast one of the worst winters that we've seen in a decade. there's going to be weather in all of this. but i think as we look at what's more important what will drive fed monetary policy et cetera the jobs number. my guess we'll see something, you know, in line with what we've seen north of 250,000 jobs created in the economy, continues to create jobs at a good pace. mixed data but i don't think that's what's driving markets lower over the last couple of days. i think it's a pure case of vertigo at new highs. >> it doesn't help the euro as

rick mentioned, a big headline below 110.98 the lowest level since september 2003. that is a strong dollar. is it a headwind enough to cripple the equity markets for the economy in. >> very much like low energy prices, think about the strong dollar, price in the worst-case scenario first weep say this is how the strong dollar's going to hurt us we talk about multinationals, only 13% of the gdp and talk about all of the negative effects, how we're not going to be competitive in the marketplace. we have an economy two-thirds driven by the consumer and a strong dollar is a positive with lower energy prices and tailwinds that haven't been priced into the s&p 500 since 2015. more benefits from a strong dollar. in an academy that exports 13% of gdp, i would say in a trend we'll continue. we're the only central bank close to tightening this year while everyone else is in --

this strong dollar trend will continue. it's going to continue. at least throughout the rest of the year. >> rob, one place we might be feeling the strong dollar in the energy market. crude and brent down again. i know you've been watching this closely and working specifically on deals with raising capital with energy companies. tell us about what you're doing and what it signals where the companies think that the price of oil's going. >> credit suisse reopened markets for the energy companies back in january. prior to that during the steep slide in oil, most companies did not get to the markets to raise equity. and wondered where financing would come. what we've seen a tremendous appetite from investors focused on strong companies with strong management teams, quality assets that are going to be the survivors. investors are seeing this as an ideal opportunity to put more money behind the survivors in the winters. >> art, you've been saying we're in a bottom formation on energy i don't know it doesn't feel like that. it is a bottom certainly not a

smooth one. >> that's for sure. i think we'll glide over that analogy and talk about the fact that oil, both brent and wti, are exactly where they were a month ago. think about this precipitous sell-off that went fromdown to january, we were never in the same place a month at a time. unit directionally lower and never a chance to catch up. we've seen a rocky bottom. you have 1% 2% lows but at the end of the day exactly barwhere we were a month ago. that's what bottoms look like. does that mean we can't have one more sell-off and have a 30? it's entirely possible. the good news we're starting to see stabilization. to rob's point that means energy companies go back out and capital markets lowill do things they need to do raise capital where needed. e&p companies will stay in survival mode and oil field

service companies will in the worst shape they've been in. from this juncture forward as we look to the second half of the year, a great deal of opportunity in energy. i think that's what we're trying to say here at the point in the cycle. >> rob, back to you. i mean there had been a sense, i think, there might be a distressed opportunity for some of the companies or for distressed investors. has that materialized in the way people thought or has a lot of capital run into the names? >> much less so. for the qualify names we're seeing things not get to that point. i think investors are taking a long view. these are high quality assets. they'll be cost competitive. investors that we're talking to the big institutional investors know that the u.s. on conventional, the good assets going to have an important place in the market and buying on weakness and looking through short-turmoil prices and looking through, i would agree with art, many of our investors expect to see the potential for

three-handle on oil for short term in the spring and willing to look through that because values are compelling. >> do you anticipate there will be distressed situations down the line? exxon overnight in a presentation has cut $5 billion from its capital spending for the year. it's well above 30. but presumably some of those engineers are going to go to the wall, aren't they, if this keeps go on? >> yeah certainly going to be some reduction in workforce and a reduction in spending no question. the i think the bigger story here is the mid cycle outlook for oil. credit suisse has a view of oil 56 this year 72 next year. we see similar outlooks in the investor community looking at this as a great entry point. >> wti over 50 we'll leave it there for now. thank you for joining us rob and art. >> thank you. >> two teen retailers some of the biggest movers of the day. abercrombie down sharply american eagle getting a pop.

courtney reagan back at hq with more. >> feels almost appropriate to have angst in the teen sector with one on the upswing and the other in the doldrums. both under pressure from the cool fashion crowd. abercrombie q4 earnings in line with consensus but revenues fell short and comps down 17%. executive chairman warns of currency pressures and that its logo business will suffer in the first half. abercrombie doesn't fit in like it used to. retailer fame or for higher priced duds. mike jeffries the form or but longterm ceo said it's a brand for the cool kids. with jeffrey's gone the door's open for a brand makeover. abercrombie searching for a ceo but executive chairman outlining 2015 priorities which include improving sales with new and different merchandise with fewer logos focusing on experience investing in omgny channel and expanding internationally. american eagle, beating on both

top and bottom lines with better than expected comp and issuing guidance above consensus, taking a two-cent hit for port delays. searching for a permits ceo. the brand has nerve gated the teen landscape, changing merchandise with changing preferences, for active wear less preppy. fast fashion players like h&m and forever 21 stealing cool from traditioning teen retailers. >> when we come back alibaba touching its lowest point since its ipo back in september. you remember that. investors more concerned that the company's sales growth might be slowing down. talk about what to do with the name when "squawk on the street" continues. the dow's down 146.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 work. we strive for the moments where we can say, "i did it!" ♪ ♪

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shares of alibaba slightly higher this morning but the acceleration this year has unnerved many raising a staggering $60 billion of shareholder value. joining us now, manager director or the internet interactive entertainment site of ubs. welcome to the program. >> thanks for having me. >> what what should people do with alibaba.

>> people should be buying shares here. what happens happened over the last one to two months some of the optimism from the ipo has worn off as likely happens with technology ipos. now into the blocking and tackling part of the alibaba story. we believe growth is still going to be good. we think it's reasonably valued against growth here on a going forward basis. as a result we'd be biased of alibaba. >> "the journal," the allegations of brushing where venders pay other people to basically make them look good online. how concerned are you that could have inflated figures we have for alibaba? >> since the ipo a lot of things highlighted via prospectus and going forward about what happens on alibaba as a marketplace. really where people meet each other to exchange goods and money online. there's a lot of thing you can do to control people coming into the environment, some things you

have to learn as you go and correct that behavior. what we believe alibaba's doing, highlighted by conversations with the chinese government as they've stated them publicly are that alibaba's focused on fixing things as they come to light in their marketplace. it's no different different than growing pains ebay went through in the early days of its marketplace in 1990s. >> where are we? we talk about some of the excitement perhaps disappearing after the ipo. but clearly after the last earnings report there was some people who decided to sell. not that that doesn't have a great growth rate but the multiple was very high. your estimates and what alibaba will do for the year and where the multiple stands and why, in your opinion i guess that represents value? >> on the last earnings report what i would say they did 49% gross merchandise volume growth. we thought that was better than expected better than our numbers, better than street numbers. they did have a bit of noise in

take rate between what gets done in mobile and desktop. if you sort through the noise, the strength of alibaba's there. my colleague in china and i put out i note this week talking about high 20s percent type revenue growth going forward for e-commerce in china over the next couple of years because china's low penetrated on mobile, in e-commerce, therefore we think there's a lot of growth inside china for alibaba and areas for growth outside china. we believe alibaba will be one of the few global e-commerce companies and market servicing companies over the global scale in the next five to ten years. >> why do you believe that? >> model works. marrying buyers and sellers at very low take rates which allow for sellers to keep a high percentage of the economics of a trade has shown to work globally. there are two models around e-commerce, amazon which takes full ownership of customer service and fulfillment and the marketplace model. think of the aren'tways for

internet names, globally e-commerce is high single digit percentage of total consumer retail sales. that for us is a long penetration curb ahead for a lot of players not just alibaba. >> your recent bullish note on google. i know you took up the stock price forecast to 670 from 630. what do you think in general has been holding google back? it's done better lately. >> it's interesting. to transition from alibaba to google, we think these are the two most hotly debated name in u.s. internet that have wall of worries around them. google is sort of facebook and apple. how do they compete against them going forward? what we did in the report we take what we beavlieve the top ten debates on google most drilled down to how is the search business going to evolve?

we believe mobile search is a big growth going forward. we believe android and applications position them well. issues around regulation cycles. we tried to address the debates saying we came out on the bullish camp than not as we did extensionve work on the debates. >> you may have contributed to the rise the 5% gain if google in the past week eric. what you do say in the note and this is the most tantalizing, to point out that they're sitting on $60 billion of cash at the moment. and that that will swell over the next five years to 188 billion. that's the projection that you have therefore, you believe they will be pushed into paying a dividend or a stock buyback. why do you think that that will happen? will that happen if there isn't a repatriation holiday? >> well i think the repatriation holiday, which came up on the last earnings call can be a catalyst. we looked across the landscape of not only large cap tech but

large cap s&p 500 in general, this is the only name that done return capital to shareholders we've been making this call for the last year. we're not going to stop making it. our view there isn't enough places to put the money over the next couple of years and google shareholders, if they were to get some of the money, we believe would rerate the shares. right now we believe google is getting no value for that cash pile in its p/e multiple today. if they were to do something more shareholder-friendly with the cash, we think the multiple goes up. >> eric sheraton from ubs. >> when we come back is donald trump considering running for president in 2016? we caught up with him in florida. find out what he had to say about his future in politics.

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welcome back to "squawk on the street." check out shares of alcoa, tumbling more than 6% after bank of america, merrill lynch issued a downgrade of the company to neutral from buy with a price target of 17. the bank citing lower aluminum price forecast as the reason for the downgrade. thursday kicks off the cadillac championship in miami, florida. dick's sporting goods came out saying their same-store sales at golf galaxy locations is down more than 7% and they've decided to focus less on the sport after sluggish equipment sales. donald trump who owns 18 golf courses around the world, says high-end golf is thriving. three years ago he bought the

doral resort out of bankruptcy and pumped a quarter of a billion dollars into it. >> i've been buying for the right price. golf at high inis doing fantastically well. look at trump national doral, we opened the blue monster, you can't get on it. tremendous success. it's 450 to $500 a round and we have waiting lists of people trying to get on. now a lot of it is success of the tournament the cadillac championship, it's a world golf championship and it's been tremendous. i would say golf at the high inis doing phenomenally well. i can talk about dick's i don't know what dick's is it's a store that sells cheap stuff. golf at high end is doing great. i've viewed golf the people in the golf industry that are doing it differently are making a big mistake. golf should be an aspirational game something that's aspirational. and i think if they look at golf as being other than that they're making a big mistake. >> when it comes to presidential run, fresh off of cpac the republican meeting, trump says

don't count him out just yet. >> right now, a lot of people think i'm having fun playing games, it's not about that. it's about making the country great again. i can do what i did here take a piece of property in trouble and made it the hottest resort in the country. this is now the hottest resort in the country, trump national doral. i could make the country great again. we'll see what happens. i'm looking at seriously. we'll make a decision in the not too distant future. >> trump has flirted before but never been a candidate. don't miss coverage of the world golf championship cadillac championship thursday on the golf channel and continuing on nbc. >> when he says i can beat hillary clinton that's a powerful statement. very pow forful. >> don't you think anyone would say that. >> i guess so. >> when we come back talk about stocks, selling off today. dow's down almost 160. art cashin will join us at post 9 in a moment.

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the supreme court has begun hearing arguements on a something attack on obamacare. the claims people who buy insurance on healthcare.gov are not eligible for tax credits.

opening statements begun in the trial of tsarnaev. lawyers will make it clear he was influenced by his older brother who died following a shoot-out with police. mcdonald's will stop buying chickens with antibiotics. most aggressive step to force chicken producers to change practices in the fight against superbugs. the world's oldest living person celebrated her birthday today, turned 117 and she appeared before the local media in osaka with her 92-year-old son. we wish her a very happy birthday. that is your cnbc news update at this hour. back to you guys. welcome back to "squawk on the street." i'm jackie deangelis. department of energy out with the weekly crude inventory report. expecting a minor build. we got a build of 10.3 million barrels. crude trading at 50.50 before the report. down 37 cents now.

by all accounts a bearish number. gasoline inventories flat on the week. also looking at cushing number people like to know what's happening in cushing. that was up 2.4 million barrels. watching these prices right now. this could be potentially more bearish as the market digests what's happening here. traders looking for draw downs to believe these cap x cuts and rig declines are starting to have an impact on production. right now very very big build here. back to you. >> wow. more than 10 million barrels, that is big. we're seeing 1% decline on new york crude. thank you. bearish for the price. speaking of stockpiling oil, what does that mean for the real economy? oil's beinging stocked away in every kind of storage structure available from above-ground tank farms to underground salt caverns. morgan brenting live with more on that and what it mean for oil prices. >> reporter: good morning. you heard numbers from eia from

jackie that really large build more than 10 million barrels. in the past week. the reason we're seeing this here in cushing, but other parts of the country like the gulf coast because it's more profitable to store your crude oil in tanks, like the ones behind me and lock in on higher prices through the futures market for delivery at a later date. so here in cushing, storage has been building at a record rate over the past couple of weeks. and here specifically at enbridge energy partners where we are, the company won't disclose how much of the tank farm is leased but the lease rates it's getting are higher than they were a year ago because of the strong demand. as you mentioned, several ways to store your crude oil. the least expensive way is underground salt caverns. that will typically cost you 25 cents per barrel per month. above ground storage like the tanks that you see behind me looking at an average of 345050

cents per barrel but some paying as much as a $1 given the strong demand. most expensive, crude tankers cost 1.25 per barrel. the last option floating storage, is something you don't see with u.s. oil. that something that happens abroad. here in cushing, the reason folks storing oil here it's considered a less risky option. you have a huge pipeline infrastructure, also the fact that west texas intermediate is priced here and is set up for delivery here. but as cushing continues to fill up analysts saying you could see full operating capacity as soon as next month. you're going to see traders have to consider other options or bring their supply to mark which in turn could push wti prices down. over to you. >> thank you so much. incredible story. dow's down 153. crude oil has lost $50.

art cashin director of floor operations at ubs, joins us here at post 9. the biggest inventory build since 2001. drowning in the stuff. >> and you couldn't be more apt with morgan's report from cushing. the feeling here is that if they fill up cushing, there will be enormous amount of pressure on oil because there won't be many places to store it. take it out of the well you have to sell it. we'll come to that i think, within two to three weeks. >> hanging around these levels 20.90, right where we were at the end of december. how important is that support? >> 20.85 to 20.90 is the key support level. you broke down below 20.85 you'll do technical damage on the charts. traders cross their fingers and hope we hold here the mark's not behaving very well. took out yesterday's low, something you prefer not to see

but it's happened. now it's got to maintain support. and basically markets all around the globe are nervous. the royal bank of india cut rates. and suddenly rolled over and closed negative on the day. not a good sign. big selling in shanghai on tuesday. that's what got traders nervous. >> fundamentally, has anything changed over the last two days to drive the sell-off or is it a pull back on the nasdaq 5000 excitement and everything else? >> i think it's a little bit of that. you can see several markets have entered kind of a rectangular sideways move. traders are get nervous about that too. nobody rings the bell at the top. when they can't make further progress, you say i want to reduce my risk. >> you've got the beige book this afternoon, which is the read on the economy going into the next fomc meeting they may drop the word patient and talk

about the next rate rise in june or july and the european central bank tomorrow that's likely to detail over a trillion dollars of bond buying. a lot going on. >> an awful lot going on. and you have things going on in china also. meeting there, they're going to probably put forth the budget and their assessment of how the economy's going to grow. some talk that they may use a number below 7% which would be wonderful however, but in china that's terrific slowing down. >> transcripts from the fed meeting march '09 coming out. a lot of talk from yellen about people, even back then she thought, perception that the fed was printing money with abandon was in her head. one line disturbing sign of how tough things are getting, people appear to be break into their piggy banks to make ends meet. huge increases in the amount of joins brought into our inventory. remember that. >> yes, yes, i do. you know it was time to raid

the mattress and the piggy bank. once we got past the lehman thing and commercial paper markets froze up everybody was vulnerable. i don't think there was a household in the country that wasn't deeply concerned. >> but to that point, while the federal reserve might not be doing it right now, qe everybody else in the world is. you mentioned india overnight, china over the weekend. the latest in the string. ecb starting this week. with that kind of environment, can you really be selling stocks? can you really be going against risk assets which have been so supported by the easing money policy over last few years? >> no it has been but it's beginning elsewhere now. people are going to see that as a foecus of attention. you had muller on the other day and said because qe beginning in europe he was going to invest there another reason you might see people taking money out of this mark to put it elsewhere.

>> good to see you. coming up, apple and google scrambling to fix a freak security flaw that left users vulnerable for more than a decade. find out what information could have been hacked. that's later on in squawk alley. we'll be right back. say you're a finance guy. a farmer. a researcher. you used to depend on experience. the internet. your gut. today you can use ibm watson analytics. it can make sense of all kinds of data. uncover hidden correlations and new opportunities. and give recommendations with more confidence on who will buy. what to make. where to plant. which helps you make smarter decisions. there's a new way to work and it's made with ibm. over 20 million kids everyday in our country lack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change.

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we are off our lows but down 147 point on the dow. industrial sector all sectors are down but the industrials faring the worst. courtney reagan has more. >> that's right. all ten s&p sectors are negative this morning. but like you said industrials leading wait down. the sector down about 1% and

that's so far today. one of the biggest losers in the sector is fastenal down 3%. a february sales report showed a decline in average daily sales compared to last month. other companies seeing significant declines united rentals, rockwell caterpillar down 2% this morning. >> thanks for pointingous movers. now over to chicago. at the cme group, rick santelli the santelli exchange. >> good morning, sara. what historic times we live in on so many levels whether it's foreign policy markets, central banks. so i'd like to welcome my guest, louis woodhill. thank you for taking time. you know in one of the pieces you wrote, it was about incentives matter. i couldn't agree more. maybe you can tell me how they matter and smanexplain what fte mean. >> fte, if you worked one hour

last month, the bureau of labor statistics counts you as being employed and an explosion of part-time work since the recession hit and since obamacare hit. i use full time equivalents to be able to compare apples to apples. in terms of full term equivalence we got back to level of november 2007 in terms of jobs last month. >> all right. with regard to incentives you picked interesting examples. one of them is sunsetting exextended or emergency jobless benefits you didn't mention the sequester but anybody who watched the budget deficits know both of those have been misinterpreted in terms of what they did, why they did it. maybe you can explain. >> in terms of both extended job benefits and the sequester, conservative economists were right and liberal economists were wrong.

the economy actually sped up after the sequester hit, though keynesianism said it would slow down. it sped up. when we stop paying people to be unemployed fewer were unemployed. >> is there any apologies or reversal of thought by the camp that didn't have it right, which shows up in a keynesianism forum every time there's an issue? this is very important. we live in 24/-hour news cycle. >> the left is institutionally incapable of learning the lesson. they back calculate what would have happened if the -- you know, if the -- their policies weren't followed some their policies always work in their analysis. >> all right. with the final 35 seconds that we have give me some incentives you would implement to put americans to work and help our economy in ways we haven't seem

to have gotten escape philosophy in. >> three things stabilize the dollar against the crb index, eliminate corporate income take and pare back obama's regulations on anything and everything. >> do you think there's any chance we could actually see any movement on any of those three camps anytime soon? >> not until the election. but this is what the election should be fought over is economic growth. what produces it. >> we seem to go from elections to election and waste two and four years at a time. we're definitely doing some damage but that's for another discussion. thank you so much for taking time. let's go back to sara and the gang on "squawk on the street." >> thanks so much rick santelli. when we come back million dollar homes back. we'll take you to greenwich, connecticut, an area known for megamansions showing you three home s

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with a twist. those time around taking you inside three homes in the same city but only one of them is listed for a million dollars, the other two priced higher or lower. we'll try to guess which is the true million dollar home. first, diana olick a snapshot of the housing market in featured city greenwich, connecticut. >> greenwich connecticut, known as megamansion alley, it's one of the hoytiest housing markets in the nation wall street fueled not only old line luxury but massive new builds the housing bust took the recession hard and more than a few mansions sat on sale for years. some owners flailing and some in prison. the money came back and so did sales with several properties above the 10 million market last summer. median home price 1.5. year-over-year price change up 4.6% and rising. the supply numbers are tricky but we know there's a major mansion glut. finally the unemployment rate at 7% is well above the national

averagen let's see what's on the market in greenwich. >> nestled on a private cul-de-sac this charming bungalow 1800 floors and open floor plan that boasts a living room dining area and renovated kitchen. three bedrooms 1.5 baths. finished basement and detached summer room in the backyard. >> this fully renovated new england cape sits on one-fifth of an acre mud room sleek kitchen, dining area and living room make up 2,363 square feet. five bedrooms including a master with walk-in closet and 2.5 baths, the suite master has heated floors downstairs a finished basement and backyard large enough to fit a portable ice rink if you want it. >> on an oversized lot this colonial lies in the heart of old greenwich.

16 1617 square feet, living room, kitchen, den, dining room, access to a patiopp. three bedrooms 2.5 baths, master and spacious attics near shops in the town's yacht club. >> all right. which one of those greenwich houses is the million dollar home? who better to ask than our cnbc contributor and super broker dolly lens. >> guys, thank you. what do you think of these houses and which one do you think is actually the million dollar one? >> i'm going with the colonial. >> i would as well. >> for 1600 square feet. >> yes. >> unbelievable. you all got it. that's pretty amazing. wow. it is the colonial. >> the one with the potential for an ice rink that was more. >> 35% more. quite a bit more. what's interesting in this market the median price is 1.521. all these houses are well below the median price for greenwich and all really nice houses. the custom colonial has super curb appeal and i mean i think for a million dollars it's not much better you can get mae

where. . . >> is the function square feet mostly. >> tiny house, 1617 square feet but does have bonus spaces like the finished basement upstairs space. people find a way to make spaces work and it does have 2.5 baths. some of the homes had 1.5 baths and waiting in line is not so appealing to people. >> tough for a family. >> it is. >> what are taxes like for those of us who don't know? >> taxes on the high side like in the 7 grand a year range. don't forget, income taxes are much lower. people actually do cross the border to be connecticut residents and that's why all the hedge fund guys are up there. >> i didn't realize probably not where we've got these houses but i didn't realize a reliance on septic tanks in the space and fresh water, you to have oftentimes your own water supply. >> your own well. >> like 20% of homes? >> yes. but not in this area. we're in town in these homes so those don't have that problem. but you're right. >> what does the market look like there right now in wealthy

places like greenwich? cooling off a bit? >> what diana is saying. there is a mansion glut. not these houses but the mega homes, right, are truly a mansion glut. lot of houses on the market. great houses. people have been on cnbc all the time, have their houses on the market so very interesting. they're all looking to go to warmer climates. >> because the forners don't buy there much. >> people went there because of the lower taxes, the state income tax, and then they're saying they're getting older, want to go to florida, want to go some place warm. no income tax. why be there. >> some folks writing in saying 7,000 on the high side. i pay 20,000 right on a home in that area. >> yeah. >> can go higher. >> i'm sure it can be 40,000 and 50,000. yeah. >> all right. so you're going to reveal -- what happens here? >> you won. >> we got it. >> you all got it. the first time that has ever happened. >> we're good. >> seriously. >> the big show. >> really phenomenal. thank you so much.

>> dolly will be back in "power lunch" and visit three new homes in baltimore, maryland. >> yes. >> the market like there. >> yes. there you can get a lot of house for your money. it's interesting while these are 1600, 1800 square feet there they're 3600 3300 3800 square feet. >> i see. >> lot more for your money. >> by new york standards huge. by japan standards, wow. >> good to see you. >> thank you so much. >> dolly lens. >> on "squawk alley," the apple watch will be a flop the person who wrote that review will be here live when we come back. hey, girl. is it crazy that your soccer trophy is talking to you right now? it kinda is. it's as crazy as you not rolling over your old 401k. cue the horns... just harness the confidence it took you to win me and call td ameritrade's rollover consultants. they'll help with the hassle by guiding you through the whole process step by step. and they'll even call your old provider. it's easy. even she could do it. whatever, janet. for all the confidence you need td ameritrade.

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two days to go until the jobs report. that means another opportunity for you to nail the number on cnbc. tweet us your predictions for the february payrolls the handle is @squawkstreet with a #nailthenumber. the winner will receive a cnbc laptop case autographed by the squawk on the street gang. >> or it could function as a purse or murse. >> let's sign it. >> you'll have one minute before the jobs report release on friday to tweets us your predictions. good luck.

may the best man or woman wear the purse on friday. >> the expectation for 240,000 jobs created during february a bit of a slow down how much weather is going to be a factor the cold weather and what kind of effect that will have on the job market. you saw private sector jobs cooling off on the growth below economist forecasting this morning. >> you know so much about it maybe you should come in to work on friday. >> going to cincinnati. >> but we are watching the markets as simon signs the nail the number. >> should i sign it on the back. >> the dow is down 141 points. the s&p 500 is down three quarters of a percent the and watching oil. we got the big inventory report simep, out we did in the hour. >> we did. >> 10 million plus barrel build having an impact with wti crude oil prices down a little more than 1% as jackie deangelis said when she broke the number bearish, a lot bigger build of stockpiling of oil than expected. >> as morgan and david pointed

out within they have run out of space to store the oil what happens then? the prices could go lower. >> down even further others like art hogan with us in the beginning of the hour say we're in a bottoming formation on oil. going to be a little bumpy along the way. so keep an eye. >> he's always optimistic art. >> art hogan. >> optimist by nature. >> is that going to drag downs the broader market. we are looking at two back-to-back days of declines. right after that day, earlier in the week where the nasdaq hit 5,000 and the s&p and dow closed at record highs. >> the main takeaway it's nailed the number and the jobs report on friday even though sara won't be here. tweet in your estimate of what the payroll report will be. >> all right. with that shall we send it over to carl for "squawk alley".." >> good morning. almost midnight at alibaba headquarters in china, "squawk alley" is live.

♪ welcome to "squawk alley." joining us jon steinberg the ceo of daily mail north america. kayla tausche is here. jon fortt is in barcelona at the mobile world congress. hearing from john in a moment. let's begin with the markets today. red again as sara and simon just said. biggest two-day decline for the markets since january 27th and 28th. for most of the day, not a single dow component has been in the green. oil, stubbornly hanging on to 50 or at least close to it after an amazing build in inventories and bertha keeping us honest on