here? it's thursday march 12th 2015 and squawk box begins right now. >> live from new york where business never sleeps, this is squawk box. >> good morning, everybody, welcome to squawk box here on cnbc. i'm becky quick along with joe and andrew. welcome back. >> thank you. >> good to have you. >> missed you guys. >> we did too. >> i don't believe that part. >> we did. i'm glad to see you, thank you. >> joe didn't want to jump in on that. >> kind of. >> you kind of did. good to know. >> this is a lot. >> welcome back. nice to see you. >> very nice. apple fans can wake up happy today after an unusually long 12 hour service outage of the app stores. the company is reporting everything is back online. an internal technical error is being blamed for the problems. as you get ready for the day ahead let's get right to the markets this morning. yesterday the dow was down by about 27 points.

s&p was off by close to four points. you could see this morning there's green arrows but we saw this yesterday at this time. right now the dow futures are up by 53 points by fair value and the nasdaq up by close to 13 points. >> we had a couple of big stories we're watching this morning. we had a flood of economic data. we have import export prices and in global news. lowering a key rate to 1.75% and then a business update conference call coming up at 10:00 a.m. eastern time. the company has come under a lot of fire. it doesn't meet california's admission standards. shares got a boost though yesterday after he made his case for the stock right here on cnbc. >> a number of stocks to watch

this morning. it's going to explore spinning off it's helicopter unit. this is the first big move. he will join us on set. we'll talk about all kinds of different things. >> exactly. >> we'll ask him about it and he probably -- you saw what happened back in the fall and the notion was he was detached. he's been in the trenches for years and years. they said let's just do this. he was the guy probably running the company. he has a good idea right now. he probably knows exactly what he wants to do at the company. it will be interesting to hear what do you do with the mix and

how do you go forward with either buying or -- they made big acquisitions in the past and supposedly looking at other acquisitions but the dollar most of their sales are outside the united states. there will be a lot to talk about at 7:00. i met him before and he's funny and quick. so should be good when he comes on. anyway general electric who is also trying to figure things out is considering making deeper cuts in it's banking business. the wall street journal reports they decided that returns from lending are no longer worth the anger it provokes among investors investors. shares of general electric. shares pause of the large presence in the financial area and then shares of shake shack, we just talked about this under pressure this morning.

it's a small market cap company but had a pretty high valuation. it's a well-known name. this is the first report after going public in the big ipo and posted a larger than expected loss. but i think they talked about food costs more than anything else didn't they? >> you see that down almost 6%. >> you got the point and time. >> take your victory lap and run. >> did we have it on tape that i made the comments? i want to make sure that -- >> which way he's coming. >> exactly. >> why don't we check on the

other markets this morning. right now it looks like ftse up by .7%. the dax and germany are both slightly weaker this morning and increased the market up by .6%. in asia the nikkei was up by 1.5%. shanghai up sharply. oil prices was the big story yesterday. crude oil fell to a one month low. we got some inventory data that showed the supplies continued to keep building. it settled down at 48-17. you can see this morning it's up but slightly by 37 cents for wti. >> it looks like the ten year note is yielding 2.079%. take a look at what's happening in the currency markets. yesterday the dollar continued to strengthen against the euro. it's still there today at 1.092.

that's strength to the euro relative to what we saw yesterday but euro trading at below 106: it's at 121, 13. they settled at the lowest close this morning up by $9.10. >> kayla is here to break down it for us this morning. >> it's something they're still trying to digest the morning after. what implications they mean for shares. the federal reserve did approve the capital plans for 29 of the banks that in year 5 are undergoing the stress testing process. the reason the results are americamerky is they got conditional approval. ultimately the cap pal levels of the bank are strong. they will resubmit the plan in

q-3. he is committed to the fed timing and in the meantime they did get green lighted for a $4 billion buy back. other big banks barely squeezed by when you included the pay out. extra stress was placed on capital markets businesses in this year's test by assuming in the next crisis more companies could go bankrupt. that had implications for goldman sachs, jp morgan and morgan stanley that had to revise what they planned to pay out to shareholders because they would have received failing grades and now each was able to raise dividends. morgan stanley put a $3.1 billion buy back in place. most notably citi group sailed through and getting to raise it's dividend to a nickel from a penny and authorizing a $7.8 billion buy back but the foreign bairngs didn'tnks didn't fair

so well. there were widespread and significant revenue and loss projection capital planning. it is failing for a second year. now next month, examiners will give these banks more detailed feedback on where they can improve but if you're a shareholder you're not going to be happy with the fact that the parent companies won't be receiving dividends this year. >> how much harder is it year after year after year. >> it's interesting because -- the fed i would imagine is under political pressure to not have every single bank pass in any year because you want to look like you're making it hard enough that banks are not necessarily preparing for a certain exam. that it doesn't get so easy that they know how to well their assets how to build their books. >> if you want them to keep a certain level of assets or capital, tell them what to model it on. tell them do it on the 100 year

plan or assuming there's a 10% decline in housing. i don't understand the idea that we're not going to tell you what the standards are but you have to figure out the rest yourself. >> there's some nuts and bolts very similar so this year's test indicated it would contract 6.1%. housing prices would decline 6.1%. the dow would fall below 8600 so some of those you would figure out what happened ifs the market depreciates quite a bit? what happens if home equity falls that much? so you can predict some of that but they said what if corporate default rates fall in a big way or rise in a big way and bankruptcy also rises. what happens to equity prices and spreads in the bond market? >> but the commentary is we're still fighting the last battle. we have come out of that already. they're now -- you know still affected and almost still

wounded by what happened so that they're setting everything too high. that hurts what a bank's ability is to lend money. causes the velocity of money to be low. makes the economy grow for the 6th straight year at 2%. they're saying this is typical overshoot after a crisis and we're preparing for things not likely to happen. >> you could argue that banks capital levels doubled in the last three years. it isn't really that coupled with keeping leverage low. aren't those the two most important things in keeping that financial system capitalized. >> they should do what they're there to do. be there to fund an economic expansion. >> steve went further on closing bell. >> he wanted less regulation. >> you should go back and watch it tnchts guy that works here?

>> one in the same. he said he disagreed with the fed getting to call the shots. >> wait a second, disagreed with the fed here. >> yes. >> when was this on supposedly? i'll go dvr. >> it was between 4:30 and 5:00 and it was a pretty interesting comment. it was a discussion about what to extent should they be main gaining banks capital levels but green lighting raises and buy backs. >> it wasn't a doppleganger. >> let's bring in another voice to this conversation. >> to be honest with you, i saw it when i was channelling it. >> you did? >>. >> it made since to me and he knows this better than anyone else. >> let's bring in the vice president of he equity research. your thoughts on this whole

issue. >> clearly there's a massive change in the industry in the united states. we have nationalized the banks and i can give examples of why that happened. the nation seems to want socialism in the industry and what we're trying to do at the same point in time is shift, if you will risk in lending to the private sector and that's happening because we have stimulated the growth of business development's partnership, peer to peer lending companies, all the way down to pawnshops so we're looking at a financial system which is going to be significantly different than the one we've been accustomed to in the 1930s. i'm not sure it's a better financial system but that's where we're going. >> what joe just said what he said yesterday, the idea that by setting these incredibly conservative standards and not

letting them know what the standards are going to be at any point, does that set it up so that we in effect are crimping any particular growth? is that why we're seeing 2% gdp when people are expecting a much bigger bounce back? >> basically steve was correct. essentially they claim this is a hypothetical test. hypothetically this that or the other thing is supposed to happen to the economy but it's not hypothetical if you force the banking companies to restructure their balance sheets to adjust to that hypothetical. so if you tell the banks we're going to have 10% unploilt or the gdp is going to drop 6% they're going to structure their balance sheet differently than if you say unemployment is going to be 5% and the economy is going to be 2% a year. but the govern lt has gone way beyond these hypotheticals. the government has stepped in and said look we don't want certain banks to be too big. we're going to penalize them if

they get too big. the government has gone into the balance sheets and said we want a certain percentage of your assets in securities and then they go into the securities portfolio and says a certain per percentage of those is high quality assets. we like you to make these loans. don't make these other loans. if you make the other loans we'll penalize you and we have gotten to the other point of creating operation choke point where the justice department goes to the banks and says you can't lend money to these industries even though they're legal industries. we have taken a look at the liability size of the balance sheet and said we don't want you to borrow in the short-term markets because we think that's a systemic risk. we want you to borrow long-term. so the government puts let's say 100 people into a company like city group or bank or america that's paid for by city group or

bank of america and their job is to make sure that the banks do what the government tells them to do. >> that's the question i want to ask you. the fed doesn't want to be seen holding the banks hand through this process but when you have so many examiners living within a bank and you still have them coming up with deficiencies it's like failing the sat when you live with a tutor. what obligation does the fed have to make sure that the banks are doing enough to meet the standards or do you think the way they're doing it is fine? >> no i think they have gone way overboard to the point of absurdity. there's no system in the world anywhere as absurd as the system set up in the united states to control the banking industry but the fed is committed. janet yellen said many times to answer questions we're going to do what you want us to do et cetera, et cetera. the bottom line is every year they tighten it a little bit more because they're operating under a theory that says we want to take risk out of the banking system and the way to take risk

out of the banking system is to force the banks to have more capital and more liquidity. in doing so they're removing the banks from assisting the economy but they're doing it because they want the private sector to replace the banks because the banks are no longer private. >> real quick, your views. do you look at a bank like that given your views on the border policy and say they're doing a great job or say not so much. >> unfortunately i don't follow them so i can't answer the question. but approximate you're looking for what are bank stocks going to do over the next 12 months since they got them down to two variables, one are they going to make a lot more loans, two is our interest rates going to go up? you're going to see that the bank stocks will do well over the next 12 months because there's also evaluation gap. if you go to the end of march in 2014 versus the end of march

this year the s&p bank etf is down 4% while the market is up 9.5%. so you have bank stocks going down when the book values their earnings their dividends are going up all through 2014 and it will happen again so there's a clear valuation gap that's going to be closed this year so even though i think the banking industry is headed in the strong direction from regulatory or government control standpoint the stocks are cheap and going to do well this year. >> thank you for joining us today today. >> thank you. >> when we come back he's called the wiz kid of the gop. louisiana governor in his own words. that's coming up next. but first as we head to a break, here's a look back at this date in history.

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the governor wants to become the face of the republican party ahead of the 2016 election. cnbc's chief washington correspondent caught up with the louisiana governor was it a 60 minutes piece i saw too? incredibly impressive i thought when watching the governor speak. were you impressed as well? or you're too objective for that. >> i've always been impressed with his intelligence and basic skills since i saw him as a young congressman elected to congress at age 33. he's still the youngest and he's been the most aggressive lately in trying to show everyone that

he is a full spectrum conservative. when he was criticized for saying president obama din love his country he said i'm not going to con testimony him. when they signed that open letter to iran he stood up and said i'm going to sign that too. i asked him if he was trying too hard. >> everything has gone at warp speed for you ran for governor very westerly. you burst into everyone's consciousness and now nobody is further right than you. some people think that you're now playing a role in order to advance in republican presidential politics. >> this goes back to the arrogance of the left and you can either be smart or con tefsh tif -- conservative. you can't be both. >> you have to be the only person against same sex marriage and say he doesn't believe in

evolution. >> sure but i got to hear very smart positions from people i disagreed with and it forces you to think about why you believe what you believe because the social pressure is in another direction but this is nothing new for me. >> he is also criticizing fellow republicans saying they're not being aggressive enough about trying to repeal obamacare. he said we don't need two liberal parties. a lot of republicans try to be cheap democrats and forget to fight for their principles. one of the challenges he'll face if he decides to enter the race is he has a big $1.6 billion budget deficit. he says that's because of falling oil prices but you can bet that his rivals joe, if he gets into this race are going to criticize his economic management. >> the piece i saw -- i'm pretty sure there are some issues in his home state now that he had some trouble just selling to the point where he would say look what i have been able to do

here. is that still the case? any improvements done in his home state. >> they're still wrestling with the budget deficits. he's been so aggressive about things that may have given a little bit of fatigue they're tired with the pace of change. this is a guy that's not stopping to get older before he runs. if he's elected he'll be the third youngest president in history. i asked him about that and he said jfk is one. who is the other? teddy roosevelt is the other. >> really? unfortunately there's not much traction that we see in the numbers usually. >> no we have a big field, joe. you have your well-known candidates like chris christie and jeb bush their poll numbers

as we saw in our nbc wall street journal poll the other day are not good. you have people like scott walker, less well-known but people are open to him. you have a wide range of targets for him and same is true for rubio and the same is also true of bobby. he's not well-known at this point and the question is whether he ultimately decides like other people that are looking at it rick perry, others on the second tier of the race whether they decided to take that step. >> any late thinking on your part? hrc is like hrh, isn't it? but this is hilary clinton, right? but interesting piece in the post. washington post and in the new york times saying that democratic party and the majority says we're sticking

with her and as a result they didn't even look that closely at whether that was a great performance or he has tanlt performance or whatever. they don't care. this is going to be who they're with anyway. >> i think that's right, joe. i think it's basically a judgment of that's good enough for us. >> i saw it a couple of times. >> there's a lot of criticism including from former colleagues in the administration, the choice she made to co-mingle the private and official e-mails but people are not taking that extra step and saying huge problem, you know think twice about running running. 86% of democrats say they're open to embracing hilary clinton. they believe she is on track to win the presidency. that's why people aren't taking seriously the idea of elizabeth

warren or whatever. >> the one other point to make was that some are saying that not only -- it may be that she's not campaign ready but also maybe her organization. there's concerns that it's not ready for primetime. so maybe that's part of it. >> that is the question. people are saying you need to get your team up and running so you're more skilled, more agile, more quick to respond to problems like this and she may get into the race next month. many will say about time. >> thanks. you can catch the entire conversation online at cnbc.com. >> still to come this morning, snap chat getting another big investment and the company behind it might surprise you. we'll have the details and the eye popping valuation, next. first as we head to a break, take a look at yesterday's s&p 500 winners and losers.

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welcome back to squawk. we are in the chairs and i know you guys give me a hard time for not driving. this is a hard story to talk

about. we're going to talk about texting while driving. a new study says that 87% of respondents think we shouldn't be texting and driving and yet so many of us can't resist the urge. 87% say they agree it's dangerous to text yet 18% said they cannot resist the urge. here's the issue. the response varies by age. so 45% of millennials agree it should be banned while driving but if you're older than 55 years old, 62% of you say -- >> they're more likely to keep texting even though they knew they shouldn't be. >> i know i'm not supposed to do it. how do you feel about doing it at a light. >> if you're at a stoplight it's fine. >> but do you need to be texts or can you be checking an e-mail? does that count as texting? >> yes. >> if you're eyes are elsewhere. >> if your eyes are elsewhere while the vehicle is moving. >> i haven't been driving lately

because i now come in in a car but it's pothole season so that has got me -- i barely have time to look down at the radio. >> 50th and 51st streets are like wagon trails coming in and out of here. >> all around jersey too and if you have low profile tires, i'm scared. at 3:00 in the morning and not the greatest of -- you know you're in the middle. >> do you think it's okay to look while you're driving? >> i'm saying for whatever reason i'm not doing it now. >> okay. >> but if i hear it go off i can't see who it's from? not even that? >> but a lot of new cars will have it so they'll tell you about it or put it up on the screen or something that's supposed to be better. >> if you dictate. >> that's okay. they say that being on the phone while you're driving is supposedly like being drunk while you're driving.

>> just as bad. >> all right. something that we always talk about that just -- it really scares me at times. do you remember in the past with sars scary and bird flu is scary. ebola was scary. we wonder is this the time its going to become a pandemic? number one, yesterday in arkansas which is the last place you need to find bird flu but they did find some in america. so all of those stocks they were all down yesterday. it was h5n2. meanwhile in china, h7n9 that will be transferred to humans is starting to come around again. back in march of 2013 it started and 579 people got it.

212 died but then they got a handle on it and now it's back again and it's starting to increase again. and it's china, hong kong malaysia and canada. there's a couple of cases in canada but they have studied this one, h7n9 and they're finding a lot of genetic variance. no one is saying if it's easily transmittable between humans but we're going to be talking about bird flu and the potential for the pandemic which it's like every three months we're worried about another pandemic. >> and you say we overplayed the ebola situation. >> yeah. >> it wiped out something like 20% of the population. 20 or 25% of a certain age. >> millions. >> when it swept the globe. >> and you can go back further. >> but this was right after world war i.

this was 1917 and 1918. it was something that you probably have relatives who know people who were involved in system of this stuff. so it's not as far away as we think. >> chickens and -- >> yeah i'll tell you about a story that caught my eye in a special segment of the new york times and it caught my attention because this author is turning 58. he said he never really paid too much attention to his retirement. he said i'm an idiot but he's describing a phenomenon that effects a massive amount of our population. people that go into these 401k saving plans but they never think about how much i'm going to need. so he decided to buckle down finally. i need to figure this out. hisvanguard. they tell you to fill out a survey that will take 45 minutes. the first question is how old are you going to be when you retire?

how many people know the answer to that question and if that's not bad enough question number two is how old will you be when you die? this is the reason people never get their heads around how much money they need for retirement because answer those questions are close to impossible. that's why most of us say save as much as you can and throw it aside. you can't answer those questions. particularly the when are you going to die and what medical costs do you have along the way? >> i cancel them separately but i've been told it's going to be the same day by my wife. i've already been told. >> you don't know when but -- >> it's going to be the same day. >> we all know how important it is to save for retirement. 45% of american households don't have any savings and the average savings is close to $3,000 which we know is not nearly enough but i think of my own thoughts and plans on this and i check it frequently and try to figure out how much we're going to need and have but i can't answer those

two questions. >> if you don't use it you lose it. you should not retire. have you ever noticed people -- >> yeah they lose it. >> you have plenty of time to think about it. >> i'm going to try to work until they take me out. >> mike wallace, those guys. >> keeps you on your toes. keeps you thinking. but anyway something to think about. save a lot of money but i understand why people can't answer these ridiculous questions. >> and plus if we're going to live to 500 years old. >> right. >> well if you're answering that question right. >> right. >> so maybe i'll retire at 300. 350. something like that. >> not so bad. >> 375. >> take up golf. >> do you think you might pass? >> no retire. >> okay. a couple of more years. >> coming up when we return, what do the following people have in common?

the answer and why you should be following their lead. we're going to talk about that next. and later you don't want to miss the ceo of u tech. and harold hamm will be joining us and mike mayo. a busy morning. be back in a moment.

he's out there. there's a guy out there whose making a name for himself in a sport where your name and maybe a number are what define you. somewhere in that pack is a driver that can intimidate the intimidator. a guy that can take the king 7 and make it 8.

heck. maybe even 9. make no mistake about it. they're out there. i guarantee it. welcome to the nascar xfinity series. welcome back to squawk box everyone. among the stories front and center this morning alibaba is

investing $200 million in photo messaging app snap chat. this is the latest silicon valley deal and could help alibaba connect u.s. and chinese merchants and customers. the investment values snap chat at $15 million. >> box is the stock to watch this morning. they posted a bigger than expected loss in the first quarterly report as a public company but it was hit by higher operating expenses and one unusual note some analysts erroneously based estimates on an inaccurate share count. >> what? >> if you fix that the company posted a smaller than expected loss. >> kind of a key number. >> except it could be -- that's how many options. >> yeah. >> we're going to talk a little bit about medicationtationmeditation. i did meditation on the airplane yesterday. >> is it possible to do that.

>> i needed to do it. we're going to talk about what it's all about. meditation at work is a booming trend among fortune 100 giants across america. ford aetna, google and green mountain coffee incorporating it into the work place. also people like dan doing it. and aetna one quarter of employees that took one class reported a 28% reduction in stress level and 20% improvement in sleep quality and 19% reduction in pain. with us is david and the author of a new book out this week. mindful work. how meditation is changing business from the inside out. i don't know if it's going to change all of business. >> i don't know if it's going to change all of business but if it can change individuals on the margins and maybe make some employees a little healthier and less stressed and make them ceos less stressed and put the interest of their employees a bit further first, that's a good

thing. >> you were saying not only do they do all the meditation but the decision on pay came from his meditation. >> he he told me when he decided in january to give his lowest paid employees a 33% raise from $12 an hour to $16 an hour that decision was inspired by his meditation practice. >> you think he comes to this idea. >> no, i think what happened is he through meditation started realizing his impact on the world. started realizing how decisions he made impacted his own life and when he thought about what he could do for his employees and the fact that as a ceo he effects the lives of tens of thousands of people he was inspired to do this. >> instead of making 60 million one year he meditated and said i'm only going to make 30. >> right and only $20 million to do it for his employees.

>> the nicks are on some meditation plan that phil jackson has them on. >> he he brought meditation. but it's important to know this doesn't make everything better. >> it might be working. doesn't mean you're going to win. is that what it was for? >> it's part of their training. on the meditation path. >> they have a mindfulness coach side by side with their weight coach. >> for people that don't do it. what is it again? is this really just a relax and reflect sort of moment? well mindfulness meditation is paying attention in the present moment on purpose, nonjudgmentally and with an accepting attitude and i know that sounds -- >> what does that mean? >> instead of letting your thoughts race into the future or get stuck in beating yourself about what happened in the past it's being right here right now instead of -- >> it's quite time.

it's like actual focused time. >> are you being mindful this minute? >> i'm doing my best but you guys are beating up on me. >> it's focus in the molt. because people think of meditation and they think of going inside maybe close your doors, shut the lights down low and you think and some people compare it almost to prayer. this is different. this is something that is po cussing while you're in the middle of doing something. >> it's focused attention but trying to be accepting of what is happening. >> how did you get into it. >> i was a confused teenager. i went off to india. i spent my 21st birthday in the buddhist monastery and it's been a part of my life ever since. >> do you do it every day? >> try but i have an 11 month old daughter. so it's not easy. >> i have done the 20 minute twice a day which is too much to be honest with you. >> it's a lot. >> but you do it for a minute or two here and there? how does it manifest itself. >> i have done ten day silent retreats and i have gone through period where is the most i can

find is a minute or two a day throughout the day and what's not important is that we sit on a cushion for an hour with our legs crossed it's important that in the fall moments throughout the day, if you can find a moment to pause before you make a ash decision. that's a helpful thing at work. >> before you hit send on the e-mail. >> exactly. it's finding the purposeful pauses. >> is there one company doing it better than everybody else? >> google has been a pioneer. they were out there. and maybe it's typical of them in silicon value but they developed this search inside yourself program and they have incorporated mindfulness and they have done a good job. >> the book mindful work. thanks for coming in. >> i was going to do it right now but if i -- i don't know. have to go to break. i can't do it. >> i get the pause before. that makes sense to me.

>> i don't know if meditation is good on tv. >> on live tv. >> let's meditate on break. >> coming up shake shack under pressure this morning. the chain warning slowing sales. the streets take on that, next.

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shake shack if you've been watching you know the same store sales growth will slow this year. joining us fortune magazine food and beverage reporter. there were other things in here john were there not, other than just maybe sales not being up to par? weren't food costs part of a problem? >> high beef prices which they say their menu price increases haven't fully offset. and they say beef prices will stay high until 2017. >> it's not a way to do things, to have a hot ipo and have everyone say wow that valuation is high. but people are underestimating the potential. and to confirm the skeptics. >> the other concerning thing was average volume at the stores. >> why would that happen?

>> they don't make as much at the stores that aren't in manhattan. if you look at restaurants outside of that market they're making less money. >> then as they expand you've got a low ratchet plan. >> and why is that? why are those stores coming under pressure? their operations just aren't at the same level? they can't get the same kind of foot traffic, what is it? >> part of it. same foot traffic is part of it. noodles & company has talked about how they faced pressure when they enter new markets. people don't know the brand as well. they have to spend more on marketing. there's a lot of fast casual chains entering these neighborhoods, these cities. so you have to compete with the potbellies of the world. panera. all these other companies. you can't count on the regional success they've had translating in austin or philadelphia. >> plus in manhattan, they have iconic locations. places that people know really well. >> not every city is going to have a times square or madison square park and so you -- they

do concentrate on good real estate, but they can't count on that all the time. >> do you want them spending more money on marketing? >> i think it's important for all newer fast casual chains to spend more on marketing. it gets people to think about your restaurant when they go out for lunch or dinner. they have some competitive advantages. shake shack sells beer at some locations. that's helpful to get people to come out at night. but what do you do in the morning? maybe a disadvantage on that end. >> i think that the experience of buying a panera or a chipotle had people excited about this. but then it doubles. you look another either a potbelly or there was another one -- that was the other -- >> noodles. >> noodles. they both doubled but they're both below the actual offering price. right? that would be a bad experience. >> fast casual chains the average is 95% return on their

first day on the ipo in the last decade. but not everybody can be the next chipotle. >> will this be more like chipotle when it's done or more like noodles and potbelly when it's done? >> i would say in the middle. they want to get to 415 restaurant locations. they're still under 40 in the u.s. so it's kind of -- you have to wait a little bit longer. >> i've heard great shakes or something. >> great shakes. great burgers. >> drive-thrus or no? no drive-thrus. never. never will have a drive-thru. >> they haven't said. but i don't think that that's their thing. >> don't you think if mcdonald's is struggling they're going to struggle. it's arguably a better burger. the fries at mcdonald's are still better i must say. >> why is it a better burger? >> there's more meat. >> and also in a lot of these fast casual pizza is another thing that's happening. a lot of chains are trying to do this. same with shake shack. they're in the market but

there's a ton of other burger chains that are trying. their competitors. really it's low barrier entry when you think about it. >> thank you for coming in today. >> thanks. when we come back this morning, our news maker of the morning. upx's greg hayes shares the component trieding near all time highs. we'll get his plan when we come right back.

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works. the new ceo of united technologies mapping a course for the company. we'll ask him about a possible

spinoff. let us export oil. that's the cry from harold hamm. asking the u.s. government to level the global playing field. and it's time to get up to speed on 3d printing. companies that don't adapt could soon be left behind. the second hour of "squawk box" begins right now. ♪ sfwlmplts live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box," everybody. this is cnbc first in business worldwide. and we are reunited. i'm becky quick with joe kernen and andrew ross sorkin. let's start with the markets this morning. after closing slightly lower yesterday, the futures are indicated higher once again this morning. of course, they were doing this yesterday and that didn't really last for the rest of the trading session. but right now the dow futures indicated up about 60 points

above fair value. s&p up by 5.5 and nasdaq 14. and interest rate cut in south korea overnight. lowering a key rate to a record low of 1.75%. asian markets closed higher. also take a look at what's been happening with the euro. this has been driving things for quite a while here. this morning the euro is indicated a little higher. trading about 1.0615. among the other stories we're watching at this hour good news for apple fans. after an unusually long 12-hour service outage the app store has everything back online. a technical error blamed for the problems. and alibaba now investing $200 million in photo messaging company snapchat. the messaging service is currently blocked in china. remember when he had that billion-dollar offer and he didn't take it and we thought he was crazy? now it's $15 billion.

setback for uber and lyft. failing to show their drivers are independent contractors instead of employees. those cases will proceed to jury trials. a ruling for the company could force them to pay social security workers comp and reimburse drivers for their expenses. and we're going to talk about banks right now. results from the fed's latest round of stress tests released late yesterday. kayla tausche is here to break it down. >> good morning. 29 out of 31 did receive no objection from the fed. but in reality most big banks barely squeezed by. goldman sachs, jpmorgan, and morgan stanley all had to lower their planned returns to shareholders. otherwise they wouldn't have met requirements. the culprit was a shock to the six biggest banks that included a sharp rise in corporate bankruptcies. bank of america had enough capital on hand but the fed found deficiencies. b of a was to initiate a $4

billion buyback. but the fed could freeze that. citigroup citigroup, the only bank that had no issues. citi had committed $180 million to the stress test process after failing last year. shareholders are now rewarded with a 5 cent dividend and a $7.8 billion buyback. two did fail. deutsche bank on its first time taking the test. and santander. examiners plan to give more details on what they need to improve. andrew? >> appreciate it. united technologies set in just a few hours. investors and analysts will be listening closely for changes in strategy now that the new ceo of greg hayes has a bit under his belt. joining us now for his first tv interview ahead of the meeting

today is gregory hayes. president and ceo of united technologies. thank you for joining us. it's great to have you sitting with us here. >> thanks. >> i've already said the -- what sort of shocked people back in the fall with the exit of the last ceo, there was nothing really going on there other than maybe he was ready to go and maybe the company saw he was a bit detached. no accounting nothing that people worry about. >> there was nothing here. he decided to retire. god bless him. >> meanwhile you've been at a company acquired for 25 years. and been cfo for five years. you probably knew more about the inner workings. you were intimately involved with the operations of the company for the past five years. >> absolutely. as cfo, really chief operating officer the last five or six years. i know the people the products the business the customers.

>> so it's easy. call louie and greg and this is done. >> the key is we have a process. if somebody gets hit by a bus, you've got an envelope you open the envelope and it's seamless. >> where i'm going with all this is for five years you're running the company and you're like if i was really in charge i would do this. or if i was really -- if this was my company, i would do this. this is how i would set up the company for the future. you've had time to think about that. now we're starting to see some of it. one thing is maybe sikorsky might not fit into your view for where the company goes in the future. >> look there was no disagreement on strategy between louis and myself. i think what we have been doing the last five or six years we agreed were good things. we bought goodrich. we spent $18 billion. we also bout out our partner rolls-royce. again, betting on the future of commercial aerospace. we also did $8 billion of

devesttures. sikorsky is a great helicopter business. if we think about the portfolio, how do you position yourself for above gdp growth or higher margin into the future? we're looking at the next ten years. while it's a difficult decision to spin off sikorsky the fact is we think it's the right thing to do because it creates value. because we have the choice now. you own the helicopter business and this remaining focus on aerospace and commercial buildings. and if you don't want to own a helicopter business, you don't have to. >> when you look at the helicopter business, what headwinds is it facing that you think the is going to make it difficult? >> excuse the pun on the headwinds. >> sikorsky has about a $16 billion backlog. they won a bunch last year. the combat rescue helicopter.

the multirole. they've got a great future. but defense spending is going to be the governor on growth for them. 2/3 of their sales go to the d.o.d. today. as much as i like doing business with d.o.d., there's huge uncertainty. rest of my business is doing 16% with about 5% or 6% growth. so again, solid future but a very different future because of the d.o.d. >> you've been very honest about activism and activists. they're going to look at companies whether -- i think at this point there's so much money, andrew they see the way to pick a company you look at a stock, you look at the stock of an industry that has performed the least and they might come into it whether they have good ideas or not because they have so much money. was this part of the idea we should do something preemptively before we get raided or whatever?

>> we're not afraid of the activists. i think again we get lots of good ideas from all of our investors. we're always listening to our investors. the idea here when i took over and i told investors, we're going to do a dispassionate review of the portfolio. and we have done exactly that. we've started a process looking at each piece of the portfolio. this is the first step in that. i think what we have left will be about a $60 billion business that is poised for high earnings growth for the next decade. so, look. there's always going to be activists out there in the stock. as i told both our board and shareholders, i want to be the activist within opposed to worrying from the outside. >> you can make a huge acquisition and have made comments that that's something you will consider. right? >> look we've got plenty of fire power out there. we've paid down about $10 billion of debt since we did the goodrich deal two years ago. our credit rating is solid today. we've got the ability to go out there and borrow money. the problem we have as much as i'd like to do a bigger deal is

valuations. valuations are sky high today. so we're going to wait. you think about the euro coming down i was telling folks yesterday. there's an opportunity over there with the euro at 1.05 1.06. where properties that may have seemed out of reach six months ago are manageable. >> can you give us an idea of what part of the portfolio you'd be adding to? what's the most attractive businesses you'd be thinking about now? >> look, we're really in two businesses. commercial aerospace and commercial buildings. and i think either of those spaces would be ideal to add into. but it's got to be in the core. the other thing is we've laid out specific guidelines for acquisition. it's got to have a 10%-plus irr. got to be roic within four years. got to be earnings within two years. so there's businesses out there in area space. there's businesses out there in commercial buildings. it's about actionability and affordability. >> you know, the -- one of the first things that new ceos usually do is get everything out on the table. i don't know whether that had to

do with lowering guidance for 2015. but most of it was forbes. the last earnings report it was really obvious that multinationals are not going to make as much money. i know you can blame it on it's foreign currency but you don't make as much money do you? >> i call it stunningly simple math. you're translating earnings from europe with a stronger dollar. look, i'm never going to be a currency prognosticator. we started out in december. we thought let's be conservative. let's set the euro at 125 to the dollar. six weeks later i'm at 1.10. now i look like an idiot because it's at 1.05. so we're planning for euro parity with the dollar. the long-term we think it's good for the eurozone. this is a huge stimulus. it's got to be good for the european economy.

while it's painful of the translation side fundamentally the businesses are doing well. we're going to grow 8% baseline across all of our businesses this year. that's pretty solid growth. currency, it's cost us 33 cents. all that is just kind of noise in my mind. the basic business is still doing very well. >> i was going to ask about m&a. we were talking about spinoffs on one side. what are you looking at on the other side? >> there's a lot of properties out there. we can do big deals, small deals. then we've got a couple of small deals in the pipeline right now really just expanding on the core business on the commercial building side. but really we want to do bigger deals. if you think about it utc at $16 billion. you don't move the buildneedle with $1 billion. you do a $5 billion deal you've got to put the team in place, do

the hard work to drive the synergies. so i would much prefer to do bigger deals than smaller deals. and we're out there looking. >> can you give us direction? are there holes in your portfolio you want to fill or bolt on things you want to add? >> i think it's more bolt on. i think it's going to be in the core. you're going to see us look at things. it's a segment we can certainly grow in. we've got a $30 billion buildings systems business between otis and our firearm securities business. making all of those systems talk to one another is key to delivering value to our customers. so i think opportunities are there. >> you're going to talk about dividends and buybacks too, today? can you tell us no? >> actually i said it in january. we started out the year with a $2 billion buyback plan. we're going to continue to look at that as an opportunity. we got good solid cash flow this year.

the only problem i've got is half my cash is overseas. little difficult to bring the cash back. not going to talk about tax reform? >> go ahead, becky. if we have time we should. we hear the same and nothing gets done. >> it looks less likely than two months ago that nothing will get done. >> you might as well buy something over there. >> although if you buy something over there, you're still talking about saying that you expect the euro at parity with the dollar and so those will still be affected by the currency headwinds. you think that is a long-term -- >> i think it's actually good news. i've got the cash overseas. i've got $5 billion of cash sitting overseas sitting there waiting to do something. and as the euro continues to decline, again, things become less expensive. i believe long-term europe is still going to be a dynamic economy. you've got 400 million consumers over there. it's not going to go back to 80 cents to the dollar we don't think.

>> what's it feel like here to you? a 2% gdp or 3% gdp? >> better. could be better than 3%. >> orders are up right? >> orders are up and very strong growth in the commercial construction markets. and we saw this starting last year. otis' new equipment orders in the u.s. were up almost 50% last year. but the fact is orders are up and we continue to see that trend as we go into the first part of the year. >> some people are putting elevators in their houses now, i'm told. i didn't know we were going to have -- too bad you weren't here yesterday. i'm not quite to that level yet. >> you don't have to be old to have an elevator. >> we figured that out yesterday. i haven't heard anyone else say it could be better than 3%. >> i think again it feels pretty good. think about the stimulus of oil prices. we haven't really seen it in

retail spending yet, but if oil prices stay low, it's a huge huge benefit to the u.s. economy. 70% of our spending or gdp growth comes from consumer spending. >> is this the first time you felt that since the great recession? >> well we talked about it in 2010 and 2011. the first part of each year seemed to be good. then we always got disappointed. i think the difference here is you have sustainability. you're actually seeing people going back to work, unemployment is coming down people are spending money. it feels better overall. >> can you find the people you need to hire? >> you know it's tough. i think we're continuing to expand in all of our businesses. we're spending money on rnd this year. we need a lot of engineers. so far we've been a i believe to fill the pipeline. but it is a continuing challenge. >> have you increased your wage inflation estimates for what you have to pay people? >> we've continued to see kind of 2% to 3% wage growth across

our businesses. we pay a competitive wage. i don't have anybody making minimum wage but there is pressure. >> good job at utc. >> great jobs. >> unfortunately you have to go to school and take engineering. >> it's hard. >> when you're not going out at night if you're an engineer. >> my son just graduated with a mechanical engineering degree. >> did he have any fun? >> well apparently. >> he's going to have fun. i'm excited about villanova. they'll be the number two seed. i've seen them. they start slow. by the end of the game it's like 40 points. starting today in earnest. not the march madness but all the tournaments. all right. great a to have you. >> thank you. appreciate it. >> come on back. >> now you go to this it's going to be easy.

>> this is like a dress rehearsal rehearsal. >> thank you, guys. >> appreciate it. coming up when we get back, david bernstein will join us on why he thinks cooler heads will prevail. and then harold hamm with his call to allow oil exports. and why 3d printing will change the world. wooem talk to a tech futurist. they will tell us why 3d printing will matter for your money. "squawk box" returns in just a moment. really came about because, not because i was selfish and wanted one for myself, which i did. its because i had, had a passion. my whole life i wanted to teach myself to build computers. i wanted to build these things for free. i just wanted to do it for the world and you know when you want something, that's what you do the best. ♪ ♪

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. welcome back, arve. richard bernstein is here right now. he is the ceo of richard bernstein advisers and also a cnbc contributor. good to see you. >> thanks for having me. >> we haven't talked to you in quite a while about what's happening with the dollar. but it is something that has captivated the market's attention. does the fed pay attention to this too and would they potentially put off a rate hike because they are worried about a stronger dollar? >> one would hope so. if the fed is looking at employment, the fed is looking at inflation. there are massive deflationary forces that are still resulting from the credit bubble. so what you're seeing is you see that reflected in the dollar. the dy index actually troughed

in 2008. >> right. >> so we're up now seven years on the dollar. this is nothing new. it's just been gradual. >> but it is pretty rapid. >> correct. >> it's almost a penny a day when you start watching this. >> it is. >> and that leads to massive disruptions. >> it does. and i think the fed -- you know the question is with these deflationary forces and the dollar's reflecting those deflationary forces, the question we've asked is when was the last time the federal reserve considered raising rates when the headline cpi was minus .1%. >> when was the last time they didn't think of raising rates when unemployment was 5.5%. >> the dual mandate allows both of you to be right. >> the point being, why would we care if unemployment is zero? if it's zero and we have no inflation, why do you care? >> we don't know what we don't know about moving money where it shouldn't go to get a return. >> but what in the economy is

overheating? >> it can go like this. it can go like that. >> the only thing that overheated in the u.s. economy was the energy sector. right? and now that's deflating too. so when people say that we have all these disruptions in the economy, where exactly are those disruptions? what is so overheated? >> we're going to taper in all the emerging markets. >> that's a different story. >> we're all connected now. i don't know. there are free lunches. just print money forever and we'll all get rich? >> remember printing money isn't the only part. it's to using credit. it's not like we have a credit boom going. the fed can print all the money they want if we shove it in our mattresses which is what's happening -- >> they've got to keep it to pass a stress test. >> your prior guest says he has this cash on the balance sheet. >> although greg lace out an

argument this morning. i like it, i think, but i'm still trying to understand it. it's not a currency war if everybody wins. we may be in a different situation than the 1930s. because the bad point, the bad news about a currency war is when you get into a bigger than neighbor situation like in the 1930s. he says this time might be different. can everybody win? >> i'm not sure everybody can win around the world. again, the currency war if you want to use that term is a symptom. the problem is the bubble left us with massive over-capacity. if there's no value added, how do you compete? you compete on price. and if you're a country you want to compete on price, you have to devalue your currency. that's what's going on. that's why japan started devaluing. that's why korea is starting to devalue. that's what's going on. everybody has to fight for market share. and the point that i think the fed doesn't -- some members don't understand is there's a global fight for market share,

how do you get inflation? market share gains are not inflationary. it's deflationary. >> when do they raise rates? >> i don't know when they do. i'm hoping that's kind of a silly word to use, but i'm hoping as you said that cooler heads prevail and they don't rush to raise rates. because we don't have an inflation problem. yes, employment has improved. but that's not so bad. if you don't get the inflation side with it, what's the big deal? and the united states is benefitting from the rest of the world's problems. so i would hope that they would be very gradual in their rush to raise rates. >> i mean even to have some ammo or dried powder the next time something happens that causes a slowdown when you're at zero how can you be arguing to stay at zero? and like the idea that at 5.5% unemployment and a 3% gdp which we just heard from uti. why not go to 2%? why not normalize it to some

extent? how much more bang are you getting for your buck? >> maybe not even normalized. >> why not go to a quarter point? >> how do we know the rate we have right now isn't a normalized rate? how do we know -- >> historically i don't think paying no interest on money is -- >> but look at nominal gdp. what's nominal gdp right now? 2.5, 3%? >> that's what we're talking about, right. >> so if nominal gdp -- >> so you want dry powder next time there's a slowdown. >> no. next time there's a slowdown, we will -- >> we'll go back to qe. >> no. what will happen is the economy will pick up through time. we'll start getting the economy vempblly. the fed will have inflation reasons to tighten. they'll invert the curve and have a recession. but that could be years away. >> that usually happens at about 12% on interest rates. not at 0%.

volcker. that was 19%. >> but think about the inflation. >> no, i know. yp. i know. but you're not going to tighten to 3% and cause a recession. we've got plenty of -- >> well you don't know. that's the point. deflation is still the overriding principle in the global economy. >> rich thank you for coming in. coming up squawk booze news. why you might be spiking your independence day punch with powdered alcohol. can you just snort it? why even dissolve it. stick around. reath in. . . and . . . exhale. . . aflac! and a gentle wavelike motion... ahhh- ahhhhhh. liberate your spine... ahhh-ahhhhhh......aflac! and reach, toes blossoming...

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welcome back to "squawk box." lumberly ly lumber liquidators holding a

conference call coming up. it says it stands behind its products and offering free air quality testing. they say their total sales are down now about nearly 8% after the damaging report on "60 minutes." comp sales off almost 13% since then. a government agency giving the okay to labels for a powdered alcohol called powcohol. get it? that clears the way for the product by the summer. powdered alcohol will be sold in foil pouchs that hold the equivalent of one shot of alcohol and are designed to be mixed with around six ounces of liquid. the faa has already weighed in and found no reason to block it. some states have already moved to ban powdered alcohol saying it could be sprinkled on footd. holy cow. that was my idea. snorted. or abused by kids. >> or dumped into somebody's

drink they're not expecting. >> right. well, who are you saying might do something like that? >> no one i can think of. >> it's scary for kids. hopefully it doesn't look like sugar. >> the only reason i can think is people are trying to sneak it into football games or other places you're not supposed to be bringing alcohol into the place. the only reason to have powdered alcohol is because you have some surreptitious use for it. whatever that is it's probably not a good thing. >> i could see you'd want to -- let's say you really like hawaiian punch or something. so you want to have an alcoholic drink. >> you add a little powder. >> because you would use vodka now instead because it has no taste basically. >> and i bet this is also lower calories. >> i don't think so. >> really? >> alcohol itself is high in calories. >> but you think in the powdered form? >> the reason that alcohol is -- >> when you rehydrate it. >> you put it into sugar.

you mix it with something. or wine by definition has -- i don't know. >> i'm told the guy who invented it was a backpacker. he didn't want to carry the heavy alcohol. but most of the uses i would think of for it would be probably not a good idea. >> what does -- can you -- they say people might abuse it and snort it. i wonder what happens. does it go right to -- that's scary. >> main lining it. >> right. when we come back this morning, harold hamm is doubling down on his call to open up crude exports. he'll tell us how to level the playing field. but right now look at the price of crude. still below 50 bucks at $48.59 a barrel.

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♪ welcome back to "squawk box." rex tillerson joined us last

week. we asked him about the biggest determining factors for oil prices in the near future. here's what he had to say. >> year after year there's another million-plus barrels a day coming out of north america. and it just keeps coming regardless of whether there's a real demand or not. >> ceo harold hamm joins us now. he's coming to us from the forbes reinventing america summit. he's doubling down on his call that now is the time to let american companies export the oil and level the energy playing field. thank you for joining us this morning. >> hey, good morning, joe. i'm glad to be with you. >> it's andrew but joe is right here as is becky. let me ask you this. the oil rebalance will be a blood bath to get there. and there is no reason to have a blood bath. what did you mean by blood bath? what are you talking about? >> well we have one situation that stands in the way of the progress of the american energy

renaissance. and that is lack of refinery space in the u.s. basically there's 18 million barrels a day refinery space and 12 million barrels a day has been set up for crude. that doesn't do us any good. we're producing live, sweet crude, the best in the world. and we're all that can handle it. there's men plenty of them out there. south korea, eastern and western europe south america for that could handle this. high quality grade crude oil. we need to get it to them. >> one of the questions you raced last time this issue of exporting and trying to level the playing field. the unfairness, if you will, that american companies can't export by foreign companies can. >> we're out here trying to compete, you know at a discounted price. west texas intermediate is right now about $9.50 a barrel less

than brent prices. so we're not on a level playing field at all. you know we need to be able to access those other refineries of the world and sell to our friends. i need to be able to deliver my oil to my partners in south korea. but i can't do it. so that's the situation and american consumers, he's paying for that. you know right now the refineries are -- they're getting brent prices rural prices. you look at the spreads and it's up 600%. those guys get $30 a barrel a huge windfall going to the refiners. most refiners support lifting the ban that was placed on us in the mid-70s under price come enforcement, if you will during president richard nixon era. you need to get rid of that scrap it and we reinvented america, we reinvent the world with this product. so, you know that's what needs

to be done. the president could do it by executive order. >> that was my question. i know the oklahoma governor met we the president just a week ago, asked him to pursue an executive order. handicap it for us. what do you think are the chances washington moves on this? >> well, i think it's good. you know national governor's association. and she asked the president about that and he said it was open to discuss. so it needs to be done. i think administration will do it. if not, you'd have to pass a bill. and it's widely supported. both sides of the aisle that would do that. so you know it's an issue that needs to be done. it's easily explained. i think it could happen. >> harold when you look at how many rigs right now do you think are being shut down and how many of those are unproductive? >> well, right now there's a lot of rigs being shut down. we've got from 1929 rigs in november last part of november down to we'll see a thousand

still working. already been about 700 laid down. about 75 a week. and these are middle class americans. a lot of native americans. a lot of mexican americans. newly created middle class americans out there that's been laid off. a lot of people focusing on me. the focus shouldn't be on me. it ought to be to the middle class americans losing their jobs. >> right. and what do you think of this new idea i guess this new concept called frac log. that's where people are still drilling but not putting the water and chemicals down to get the stuff up? >> well a lot of people are deferring completions until some of these rigs were under contract need to finish the wells they were on or whatever. but you don't have to complete those wells. about 60% of the cost of drilling is a completion cost. so people are deferring that and putting it off until they can afford it later on. conserving cash to get through

this low spot we're in. >> okay. harold, thank you for joining us this morning. great to see. are you in chicago this morning? is that where the conference is taking place? >> yeah it is. we're in chicago. beautiful day here. a lot of people here reinventing america. this is part of it. so we're glad to be here in chicago this morning. >> harold hamm thank you. coming up volkswagen gearing up to be a stronger competitor in china and the u.s. phil lebeau still over there in germany. he's talking to the company's chairman next. and later, the worst might be over for europe. that is according to roger altman who will join us at the top of the hour. help join a continent with nearly 3 million rugged square miles with a single broadband connection. when emerson takes up the challenge it's never been done before simply becomes

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volkswagen driving closer to becoming the world's largest automaker and in the process reshaping the global auto industry. phil lebeau joins us now from the vw annual meeting and that is in berlin germany, with more. hey, phil. >> hey joe. a couple of pieces of news coming out of the meeting this morning and from our interview with dr. martin vinterkorn. let's start off with the primary driver of growth for this country.

it remains china. that's part of the focus. when they factor in their equity holdings with their joint ventures, their annual profit last year was a record 17.9 billion euros. that was the record annual profit for volkswagen last year and in china they continue to invest. their current production of 3.7 million vehicles remember volkswagen is number one in china. thap that is expected to grow to 5 million in annual production by 2019. here's part of our interview earlier this morning. >> translator: if we had 1/3 in western europe 1/3 in china, and 1/3 in the u.s. we would be well balanced. which is why our growth plans go to the u.s. >> and the u.s. remains the one area where volkswagen continues to struggle because they have not made enough of an investment in suvs. that's going to change next year

and in the future they plan to add even more suvs as they expand in chattanooga. their sales this year up 2.3%. look at volkswagens under dr. winterkorn. if you go back to 2007 annual sales worldwide of just over 6 million vehicles last year it was all the way up to 10.14 million. they are on the cusp of catching and passing toyota this year. when you ask mr. winterkorn about that he's very quick to down play whether or not they will actually pass toyota. >> translator: this could be but i keep reiterating that we have four big targets. we want to be the volume number one, but also we want to have 8% upgrade in profit. we want to have the most satisfied customers and employees. those are four targets we have. and one is the volume. i don't know whether we'll surpass toyota this year. but we try to also achieve our other targets.

>> and those other targets are part of the focus of this meeting, guys. they are talked repeatedly today about the need to improve profit margins which were squeezed last year. but make no mistake. everybody in the auto industry expects volkswagen to become number one in the world this year. back to you. >> okay. phil, when are you coming home? >> that's your primary question? i'm coming home tomorrow. i'll spend an evening in berlin then i'll be on a flight home to you tomorrow. >> he misses you. >> no my primary question was when is the porsche report you promised me? i guess you're just doing all volkswagen. >> it's right there. it's right there. we looked just for you. the photographer is going to show you this love 918 spyder. one person said does joe have one of those. i said he's got five. >> ha-ha. wow.

is that the -- what's the horsepower on that thing, phil? >> i knew you would do this. guy guys guys, what's the horsepower on this one? they don't even have the information at their fingertips. but we'll find it for you. >> what about the cost? a half a million dollars or something? >> i don't think it is a half million dollars. but it is -- it's up there. now you've got them this is like the price is right. they're going up there and reading what the exact figures are on this. >> oh. he's bringing it. >> play music if you're going to do that. thank you. >> horsepower 887. >> there you go. over 887 horsepower. how's that? you like that joe? yours for a cool 824,000 euro. it's yours. >> yeah. i'll send you dollars. this is the time to do it with the euro. >> it is the time to do it. and by the way, we should say

that porsche that's one of the growth engines they had. a great year last year and they're planning to parlay that success this year. >> see, those are important questions. what am i going to ask you about volkswagen? is the beetle coming back? come on. see you later. >> hey, guys. later on we have thoughts on the apple car. interesting. >> oh, joe loves that. >> thank you, phil. we'll see you in a bit. when we come back on "squawk box," if you don't know why 3d printing could change the world, stick around. we'll talk to a man whose job it is to stay on top of tech trend and help translate them. we'll look into the future of 3d printing after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.

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in our house, we do just about everything online. and our old internet just wasn't cutting it. so i switched us from u-verse to xfinity. they have the fastest, most reliable internet. which is perfect for me, because i think everything should just work. works? works. works! works? works. works.

welcome back bb everybody. one of the big topics of the agenda at the forbes reinventing america conference is the future of making things. in the spotlight, 3d printing. jordan brandt is the tech futurist and he's joining us to explain how this technology is changing manufacturing. it's great to see you this morning. >> good morning. how are you doing? >> great. thank you for asking. when it comes to 3d printing i've seen some of the consumer aspects where you can print kind of an ugly bracelet or something that looks cheap. that doesn't make sense to me. but i understand there are much more viable products. tell us about the cool stuff you've seen. >> yeah. you know we often think about the consumer box in our home that's printing anything we want.

and eventually that's going to happen. but what we fail to realize is it's already transforming the way we manufacture products. that may not be in obvious circumstances where it's printing the final thing. but on timeoftentimes we're printing tools. >> to be able to print organs that a doctor could open someone up figure out the heart valve that's needed and print it up there. how does that work? >> well obviously now the ability to customize and be able to print organs that are specific to the dna of the recipient of the organ is a huge thing. already we're actually printing liver tissues to use in drug trials. as you may know one of the number one reasons that drugs may fail the fda trial is liver toxicity. it's a draconian system we use today using pig livers. now we can sample real human dna

and grow liver tissue to speed up the trial process for drug approvals. >> how frequently is that being used? how widespread is it? >> well it's in testing phases now. so this isn't being used you know, global yet as the method. but you can imagine now that if we could print 10,000 samples of liver tissues and test the drug simultaneously the speed of the feedback is much greater. we could expect this to come online soon. >> what about other areas? like in car manufacturing, maybe even in the production of cement homes i've heard in china. >> yeah. i mean already we're using this to increase the productivity of our plants. we're printing components of homes. you've seen this happening across the world. europe, china, even in the u.s. and also in automotive manufacturing, it's really changed the way we approach the production of several parts in that supply chain. you think one of the traditional ways of manufacturing products is injection molding where we

squirt hot plastic into a mold. we cool that plastic down and squirt in new hot plastic to make a new part. one a the primary limitations of the production rate is how quickly to cool that plastic. we're now 3d printing the molds, the tools we make to get those parts. and we can increase by multiple factors. >> how does autodesk play into all this? >> well for everything that's 3d printed you need to have a design in order to 3d print that object. everything around us starts somewhere in 3d software. and so we've been a provider of 3d software for now over 35 years. and we're also getting into the 3d printing hardware and materials market as well. because we've launched our own 3d printer earlier this year. >> okay. well jordan thank you for joining us with that preview this morning. hopefully you'll come into town some time so we can see some of the stuff in the flesh. >> you should come out and check it out. there's a 3d printer down the hall here. >> okay.

thank you very much. great talking to you. >> thank you. okay. coming up big banks scaling back plans for buybacks and dividend hikes to pass the fed's stress test. mike mayo will be with us to talk about the winners and losers. we're back in a moment. hello. i am here to offer sophisticated investing strategies. my technology can help you choose the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes. say hello at intelligent.schwab.com

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today's theme, shake it off. ♪ shake it off ♪ from stress tests to the dollar dilemma, evercore's partner and taylor swift fan roger altman reveals market bright spots and tells us where investors should be putting money to work. alibaba is betting big money on the future of snapchat. will it help revive the struggling stock? and cocktails with constellation brands. what's behind the off the chart stock performance of the last two years. we're going to belly up to the bar with the ceo to talk beer wine and the dollar. the final hour of "squawk box" begins right now. ♪

live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. we're 90 minutes from the opening bell on wall street. the futures right now are indicated up about 65. market unable to hold onto its gains. i think it's been down both days apple, since introducing the watch. we haven't talked about that. we talked a lot when you were out about a $770 billion market cap company. as of yesterday i think it's $712. still above 700. that's the question we keep posing. you know it's up 8,000% or whatever in the last i don't know how many years. does it double again from 750? >> i still think it's an underpriced company.

>> on every valuation? >> every valuation metric. having said that the whole watch thing, i have to say disappointed me. >> that's significant for you to say that. >> only because the battery. >> three-hour battery. >> it's like only if you use it as a watch and look at it never. that to me is complicated. >> we'll see. >> but excited about that laptop. did you see it? it's thin. i'm going to get one immediately. that's on my list. >> must be nice to be so flush that hundred-dollar product. what is that $800? you just go out and get that immediately. >> little bit more than that. >> i understand you have an elevator in your building as well. >> how's the porsche? >> we just talked about that. >> let's tell you what's making headlines at this hour. we are waiting for three major economic reports. here's what's happening.

weekly jobless claims retail sales. we're going to get that at 8:30 eastern time. and bum ler liquidators is doing a business call ahead. the company says it stands behind its products offering free air quality testing for customers that call. happening about 10:00 a.m. and the fed approved capital plans for all but a couple of global banks. the u.s. units of deutsche bank and san tander were among the losers. we're going to have to watch that. and talk about a lot of financials in just a couple of minutes with mike mayo who's going to join us. >> let's talk about a few stocks on the move this morning. shares of shake shack posting a larger than expected loss and warning that comp store sales stock is to slow.

also box shares dropping in early trading today. the cloud storage provider posting a bigger than expected loss. and that stock looks like it is off by 13%. plus dow component united technologies getting a boost today after the company says it will explore spinning off its sikorsky helicopter unit. greg hayes stopping by our set ahead of united technologies investor day. we asked him if he is looking to do deals. >> as much as i'd like to go do a bigger deal it's valuations. valuations are sky high today. so we're going to wait. you think about the euro coming down. i was telling folks yesterday, europe's on sale today. maybe there's an opportunity over there for properties that may have seemed out of reach six months ago. >> so is europe full of opportunities for businesses and investors right now? roger altman has an opinion or two. he is founder and chairman of

evercore partners. i'd like to talk to you about ten different things probably roger. first of all, before we get to europe and we'll get right to it, but you saw the stress tests. are we asking -- are they holding too much capital at this point? have we overshot? is that what's causing the velocity of money to be so slow and credit so tight? >> that's not what the regulators think. they've been relentlessly tightening the capital requirements and most recent big one is supplemental leverage ratios. so i don't think that's what -- >> as an evercore guy, what do you think? is it making it harder to do what you want to do? >> no i wouldn't say so. of course we're not a bank and so forth. we're not a lender. we don't position securities. >> do you think it's making it harder for the ones we're talking about to do business? >> well i think it's harder in some areas. and i do think they'll be -- there is a review by some of the

largest institutions as to which institutions continue to make sense in this high capital ratio environment. and probably some of the institutions will shrink their balance sheets because it's too expensive to hold certain types of assets. ironically including things like treasuries in this environment. so i think you'll see some shrinking of balance sheets as companies focus on higher only assets. and one of the things the regulators have in mind probably, is seeing some of the balance sheets shrink. >> so there's a method to this. they must know cher overshooting. >> i think this morning's news is good news. that these institutions by and large all pass. you have to take your hat off to citigroup because they came back a long way from the problems they had a year ago. these institutions are focused now on returning capital and getting on with large return of capital programs. and so we're now seeing probably the beginning of that with this

round of passage through the process. >> so is the speed of the decline in the euro surprised you versus the dollar? >> not particularly because, of course you look at the level of interest rates in europe. you look at the arooufl of qe. some of these interest rates look like misprints. i saw yesterday spain 10-year is trading at 50 basis points. and you say to yourself how does that square. and those are almost incomprehensibly low rates. for the euro to be weak especially with the u.s. on the verge of tightening no it doesn't surprise me. i think there's lots of kbli kags of it including that europe will now begin however slowly and however to recover. i think it's a long slow process. but i think it's off the bottom. they'll resolve greece in one

form or another. and so the comments that greg hayes made to you earlier, i think a lot of people are thinking now is this the time to come into europe from an investing point of view? i mean, a deal investing point of view? >> they might come to you for that. >> there's a lot of discussions going on about that question. there are a lot of different views on it. most people would like to see structural reform. meaning labor market reform pension reform. very little of that has happened. so i personally think it's going to be a long slow road for europe recovery. but of course in a zone the eurozone where the export share of their gdp is high unlike for example, ours. this fall on the euro is going to have a strong effect. >> one of the reasons that he mentioned looking towards europe as a place to invest is because he has capital that's stuck over there. money that he can't bring back here. hit does not look to me like we are likely to get anything done this year. maybe a few months ago i would have said something different.

>> repatriation? i agree. and the reason is -- and i can remember tim cook referring to this with you guys. when strong corporations can borrow, say, 3% most of them say i'm not going to pay a 14% repatriation tax. i can get all the cash i need at a low cost why would i pay 14% to bring it back? that's one of the factors that's a big one in this environment. so i don't think the proposal 14% repatriation tax is going to actually pass. >> so what's a number that works? >> it would have to be a lot lower. i think it has to be -- and i'm not really close to the congressional debate but probably has to be below 10%. even then whether you could actually get the votes in an environment where nothing is going to happen this year if you just look at what's going on in congress. the iran letter for example. it may or may not be

significant. >> when the president made his proposal or put out his plan was that just theater and he knew that? are people like you calling saying this is not going to fly? >> no i think that you know the state of the union address and so forth, they wanted to lay out what their vision was. i don't think they're under -- and i'm not certain of this but i don't think they're under illusions of how much is likely to pass in this lame duck environment and contentious environment. by the way with lots of problems between the house and senate. so the idea that this -- >> when we have jack lew saying we're closer than ever on tax reform. every time we see him he says we're closer than ever. you think we're not? >> well that might be true in a narrow sense because they've never been very close. but -- >> relatively speaking. >> but i think the chance of legislation on business tax reform as they call it including a repatriation deal are very

cloe low. and i think the chances of passing anything in the category of reform of any kind is very low. >> would you raise in june? >> sorry, raise? >> would you raise in june? >> i'm one who thinks they should take their time because i see labor markets still being very slack. >> even 5.5%? >> i don't think 5.5% is the best measure of labor market conditions. i think the measure which includes people who are working part-time, people who want to work full-time, people who have given up looking were that's still in the vicinity of 11%. and at 5.5% we're capturing the condition. you wouldn't see it take off. >> it's weird being at 0%. if we were at 4% then saying we should stay at 4%. but when you're saying 0% and

saying we're considering going up to a quarter point, i would do it because it historically seems so out of kilter. and i don't even believe in the inb flags thing. that can sneak up quickly lyly can't it? >> but the futures market isn't suggesting that. >> they were saying gold was worth 1900. >> well i don't think there are any signs whatsoever of increasing pressure. >> right. but some companies are starting to think the wage picture looks a little better. as much as we talk about it now, you would think eventually wages are -- it's time. because we've talked about it so much. >> yes it should. we should see some improvement. but so far it's been really small. i don't think if we were all sitting in this five years from now we'd look back and say it's between june and september. >> and i still want to get some dry powder in case we ever do go into a time when we have something other than qe to fall back on. we could actually lower rates because we can't lower rates if

there's a problem. >> that's a fair point. >> really? >> in other words, that -- >> no i just was glad that -- i like it that -- >> one of the downsides of qe and where we stand now is we don't have anything left in the tool box. often crises come out of the blue and the next one never comes from where the last one came from. and the message of the last 20 years is the financial crises are occurring more and more often. and that's rather natural around the world. but it's just a matter of time until we have the next one. you don't want to be in a position where you've used all of your weaponry. >> right. >> that's a downside of qe. right now i would say, you know i would give the fed high marks, myself. >> do you know who taylor is bringing as her opening act this time around? it's coming this summer. >> i did read that but i can't recall it. >> but you'll let us know. >> i'll e-mail you within five minutes. >> it's outside again, isn't it?

>> well a lot of them are. giants stadium and foxboro stadium and all that. i'm going to some of them. >> i know you are. i'm going to glom onto you, maybe. we'll see. >> i got a feeling there are going to be a lot of people. >> sean menendez and vince joy. >> last year ed sheeran was amazing. >> he is amazing. what a talent. >> inkr ebl. >> i'd like to see rihanna and kanye and paul mccartney open. >> you are so hip, aren't you? thank you. coming up when he's not crunching musical notes at capital theater with happy sunshine burger joint, steve leisman is crunching shadow banking. the latest report card for banks is out. will you break it all down with mike mayo after the break? and if i get to talk i'm going

to say san tander. financial noise financial noise financial noise

in our house, we do just about everything online. and our old internet just wasn't cutting it. so i switched us from u-verse to xfinity. they have the fastest, most reliable internet. which is perfect for me, because i think everything should just work. works? works. works! works? works. works. it's back. shadow banking has returned in a big way to the mortgage market.

but is this really is bad thing? steve leisman is here and he joins us with exclusive new data. >> becky, good morning. new data from fannie mae. she gave us the report exclusively this morning that shows that shadow banking has returned in a big way to the mortgage market. mortgage banks which are not regulated by the fed, they're so-called non-banks, now account for 40%. double what it was in 2009. the share of regulated banks in the mortgages falling. this could be an unintended consequence of dodd-frank regulation. and for the moment it's probably a good thing. if banks have diminished appetite for anything but refinancings and jumbo mortgages, it's got the non-banks step up. and so far nearly all the papers being sold to fannie and freddie

freddie. it's not the loans that got us into trouble in '07 and '08. but it does cast a spotlight on whether ultimately it pushes capital outside of the regulated banking industry where it's tougher to oversee and control. and yesterday, andrew when you see that the fed needs to approve dividends and share buybacks for banks it's embarrassing for a major capitalist country. and you want to know is there a way to get back to a place where the market can correctly assess what is the right level of capital? because who's to say the fed is right here? who's to say the fed is wrong. you really want to get to a place. it's one thing for the fed to step forward in my opinion. it's just my opinion. say, you know what? we need to stress you guys for a certain situation. you would think that the basic corporate function the function of a board to decide the right level of dividends and the right level of buybacks is something that should be -- >> did you fall down and hit your head yesterday?

>> what happened to you? >> i've always been this way. i felt that there was a series of measures that the regulators should have taken in an emergency. but as soon as possible, get back to a place where you're zone defense not man-to-man which is essentially the way they're running it. >> how do they defend themselves? >> well what they would say is once you get into the position of stress testing for capital, then you have to then approve dividends and buybacks. because dividends and buybacks can bring you to the right level of capital in a stress test -- in a stress situation. >> steve, stay where you are. the banks and the results of the fed's stress test we're going to continue the conversation. mike mayo is joining us. of course he's a banking analyst for csla. before we get into e the banks themselves, just policy issue. do you agree with steve? do you think we're making it too hard for the banks? are we setting ourselves up for

another catastrophe? setting ourselves up for a horrible economy because we're putting constraints on them? >> steve, it's not changing any time soon. >> right. >> the theme song here taylor swift "shake it off." you're going have to shake it off. it's not changing. but i will say the banks are a lot more resilient. the banks that failed look good by the regulators before the crisis even partly during the crisis. something had to change. but ooerndn the other hand, the equity ratio is at an 80-year high. though extent you force the industry to derisk and delever to have unintended consequences. loan growth for the past 12 economic expansions was six times faster than it is today. you're right. >> i just want to be clear. i don't come at this from a philosophical standpoint. i come from an economic standpoint of everybody puzzles about the standpoint and one

culprit is definitely slow lending. the capital goes in and like a roach motel, it doesn't come out in the form of loans. >> and there's certainly issues with the stress test. it's unpredictable. there's got ya moments and there's so much emphasis on this single outcome. we had a countdown, the time to the stress test occurring yesterday. it was the super bowl of banking and it shouldn't be that big of event. if there was a problem, the regulator should let them know on a day-to-day basis. >> you said something to me in the back. but the fed is stressing for two financial crises? not one. explain that. >> well, the fed is stressing for a nine-quarter severely adverse scenario where unemployment goes to 10%, there's a shock to gdp. this year they made it tougher in terms of the stocks going down further, volatility getting worse. but using the fed's own data

from last week you could say in aggregate, the industry could withstand not just one financial crisis, but two. so you do raise a fair point. at what point is it too much? you always want more capital. it was more capital, more capital in the '80s. but the point was where should we stop? seven years after the financial crisis, let's get the finer rules in place and eliminate all that uncertainty. the greatest source of uncertainty right now is what the regulators will do. >> who gets to come back and say -- >> well congress would like to. >> but on the stress test thing, is that something congress should do and say you need to set levels that are different? >> look, the fed oversees bank regulation with oversight from congress. so there's certainly questions from congress about the fed's role. before, during and after the crisis. so the fed, keep them at the fed please.

>> i want to talk to you about bank of america. you have concerns. this is bad for bank of america. >> we've had concerns. for qualitative issues. we don't feel as though they have a complete grasp of the numbers. you saw -- this is the second year in a row that bank of america has had had an issue with the stress test. last year they had a $4 billion capital regulatory capital restatement. they've had four chief risk officers in the last several years. by the way, did bank of america make its financial targets last year? i don't know. you know why? i'm not sure what their financial targets are before interest rates go up. you need to hold them accountable. if the industry doesn't hold banks accountable you're krading a void a vacuum. who is going to fill that vacuum? washington, d.c. by the way, i mean, the second year in a row bank of america has issues what happens to the ceo? >> he becomes the chairman. >> he gets promoted to chairman

also. again, this is not the way our system is supposed to work. >> you think that's a mistake? >> first of all, bank of america did not show the transparency of who they looked at for that role. at least delay put someone else in that position. >> don't you think bank of america has done a remarkable -- you don't think it's remarkable? the world is relative. think about where they were and where they are now. i'm not going to be their biggest defender. i'm just suggesting you look at where they were five years ago and where they are today you'd say give somebody some credit. >> absolutely. bank of america had a tough hand when brian moynihan took over. it was a very difficult situation. they resolved a lot of the lawsuits. but the question was the strategy for the last five years the appropriate strategy for the next four years. you see them having an issue with the stress test. that's not the timing. that's not the right time to promote a guy to chairman. >> you hated citigroup.

>> that's what i was going to ask you. >> what's that? >> citigroup. that was your poster child. >> you hated them forever. now they're your favorite. >> nobody says corbett did a great job. is he doing a great job? >> people didn't say mike corbett ceo of citigroup is gone if they fail. he said that. that's called taking responsibility being accountable. last year a year ago he said if we don't pass the fed's stress test, i'm out of a job. that's what we want to see. that's the right tone at the top. that is a change from the citigroup we've seen for the last 15 years. we see a path the next five years buying back stock. >> if we don't hit this government number at 8:30 steve leisman is going to resign. >> then you don't want us to hit it. >> i was going to say i would, but i'm not going to say that. when we come back this morning, a viral photo that has

golfers wondering if they should risk hitting the course in florida. photo after this. plus breaking economic news. jobless claims and retail sales data ready to hit the wires. we've got numbers just ahead.

all right. welcome back, everybody. we are just a few seconds away from jobless claims. retail sales and import prices.

in the meantime look at what's been happening with the stock market futures today. they are indicated higher. dow futures up by about 75 points. s&p futures up by about 7 points. nasdaq up by 14. we saw numbers like this yesterday morning at this time. and those gains evaporated as we got into the trading day. you did see trading under pressure yesterday. you could see the 10-year this morning is at 2.091%. obviously the euro is something we're going to be watching closely too. euro has dropped significantly versus the dollar. and in fact, this morning we'll look at that in a second. looks like 1.0617. rick santelli is standing by at cme. the numbers, please. >> oh, boy. here we go again. we expect up .3% because we had headline sales. this is soft. down .6%. a big reversal versus

expectations. and last month's down .8% remains unrevised. let's go through the internals. autos, does it go up or down? it gets stronger but it doesn't get breakthrough velocity. still down .1%. you take out auto and gas it's down .2%. 9 originally released last time up .2%. now down 1.%. on the claims front, 289,000 is the new. a drop of 36,000. put yous back in that zone. there's been a lot of movement. but it should start to zero in on a more accurate level. and if we look at the price index, also february month over month. again we get a multiple. but this time to the plus side.

price index up .4%. now, last month, though we did move from minus 2.8% to minus 3.1%. if you look at the data in entirety, you can say initial claims being lower is a good thing with respect to retail sales. i don't think i can spin this one in any sort of good way. that control number that people like to look at because it's easy, mash everything together we're looking for that to be up .5%. it's a goose egg, unchanged. now, before looking at the markets, i'll tell you what i would think yields are going to be lower. i think the bulk of this data -- retail sales is one of those top tier numbers. indeed we've shed a couple of basis points. the treasury market was doing at lo of work very close to where it had settled last year especially on some of their selloffs. we're backing away from that a bit, but we're still around 2.05. no market moves in one direction forever. so we're seeing the dollar index

actually down over a penny. i can't remember the last day it was down over a penny. so we're seeing some mean reversion. we're continuing to handicap the qe that's going on in europe. we also have more data that's going to be actually pretty important over the next several days like inflation data. back to you. >> rick, stick around for a minute. steve leisman is here and he has more on the numbers too. steve, what does this mean? we keep waiting for consumers to spend the money that they're saving at the pump. doesn't seem to be happening. >> i think that's right. there is a lot of talk in the pre-release analysis that i read about the weather having a big effect. you see that i think, in autos. also since prices are falling, the zero number that we get on the core is probably going to be ultimately as a real number incorporated in gdp as a positive. okay? so that would be -- it's not flat on a real inflation adjusted basis. one thing is you did get a help

from gas lienoline which reversed. that's all a price effect in there. but you do see things like autos. things like department stores. we know that consumers have more money in their pockets. we know that from more jobs wages are not entirely flat. ian shepardson in his analysis this morning says all things equal, consumer spending should be rising by about a half a point each month here. that's what you would expect. but he thought weather potentially had a big effect here. plus you have the impact of gasoline prices. i wonder if people are feeling comfortable to spend that. e the number that jumps out at me the most when it comes to fed policy is the ex-petroleum decline of 0.4%. that means the stuff that we're importing not counting what's happening with oil prices are falling. so again this issue of importing

disinflation. which creates less inflation in this country and lower oil prices. >> you think this number makes them less likely next week to take the word patience out meaning they could raise as early as june. >> i think -- look. everybody in the market have been waiting for the fed survey to come in. most people think the word patient comes out. i think there's a good argument for them to keep it in this time. they're going to be moving further away from that 2% goal. the report i gave yesterday morning, jpmorgan thinks all things being incorporated into their analysis they're going to shave half a point off the core inflation rate. >> everyone if they take the word patient out, doesn't mean they have to raise. >> but the trouble is the market will begin to incorporate that. if they do hike they get further away from what's happening in e the rest of the world. we saw the bank of korea cut this morning at a quarter point. and other central banks around the world are going to be cutting there. so it's all going to be the fed going even further away on what's happening around the world. i know, joe. i'm sorry. i wish they could hike.

>> we should be -- if we have to go against them we should do it to be the reasonable -- just because they're all crazy doesn't mean we need to -- >> no. the collective. joe, we all have a march together! come on! get with the program! >> they all came scurrying back. >> okay. >> they all went -- >> could we just go up a quarter then you can stay there for awhile? >> that would make you happy? >> just do it once. get off of zero. >> do it into the camera. and beg janet. >> no it won't help. i want you to beg her. >> i listen to her. but i don't know where she stands. look, i talked to stan fisher. i was right across from him. he said this is the year we need to do it. it's hard to lean against that. >> wow. crazy. 5.5% unemployment. they might go up to a quarter point this year. some time. wow. >> but down to the low ones

joe. >> okay. thank you. coming up we're going to talk about a cloudy number for the box. and alibaba making an investment in snapchat. tech story buzz when we return. as we head to a break, look at equity futures. dow looking up 61 points. nasdaq up by 11 points. and the s&p 500 up 5 points. sal khan: khan academy is a not-for-profit, with a mission of providing a free world-class education for anyone anywhere. if you look at a khan academy video, they can cover everything from basic arithmetic to calculus, trigonometry, finance. you can really just get what you need at your own pace. and so, bank of america came and reached out to us and said 'we are really interested in making sure that everyone really understands personal finance.' and we're like 'well, we're already doing that.' and so it was kind of a perfect match.

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welcome back to "squawk box." shares of box plunging after reporting its first quarter as a public company. josh lipton has more on that story. josh? >> andrew this wasn't the public debut that ceo aaron leavy hoped to make. i had a chance to speak to him last night. he said there was confusion. box posted a q4 loss of $1.65. that looked back compared to what appeared to be the consensus view. but levie says that $1.17 number was wrong because unnamed analysts he says set expectations based on the e wrong share count tweeting as much after the call last night, the actual consensus estimate was a loss of $1.99.

in that case box's results were much better than expected. but even if levie is right, box might have bigger concerns. the company is forecasting revenue growth of about 30% for fiscal year 2016 nap is a fast-growing company, no doubt. but it's a big slowdown from the 74% growth rate that the company enjoyed in 2015. levie tells me the slowdown is natural given that box is now a bigger, more mature company. he encolonelurages to focus on the number of box clients signing $100,000 contracts. switching gears, in other tech news there are reports that alibaba plans to invest $200 million in snapchat. not surprising that jack ma would be excited about snapchat. it's growing fast. users 18 and over jumped.

that would be a 40% jump year over year. and for snapchat what a better way than to explode your user base by going with the e-commerce giant in china. >> can i ask a question? how does he say they got the wrong number of shares? how does that get confused? >> well he -- listen. we're dealing with unnamed analysts. he says they were based -- they had set expectations on the wrong share count. he did say he reached out to those analysts before the earnings call. >> but it was multiple analyst who is got the wrong number of shares outstanding? dauz that happen because of stock options? i'm kwusconfused how that happens. >> it's a bis confuse ingt confusing. they fixed the number. the figure was fixed but not in reuters. so we had do competing numbers coming at us. that caused confusion. i think you really don't want to -- in talking to analysts last night who cover the company

and financial analysts say even if that's true it's not why the stock nose dived. >> josh, the snapchat with the e-mail disappears. how quickly does it disappear? >> seconds, right? >> well, you know joe, i'm actually 40 years old so i've never used snapchat. i'm not a target demographic. my thought is it disappears quickly. >> did the clintons have it do you know? >> i think even spiegel might have it checked. >> did they not think of this? maybe because they're out of it too, like we are. just a thought. might work for the future maybe as president. for that personal stuff. >> all right, thank you, josh. up next disney's bob iger talking china with jim cramer last night. we'll get his reaction next. it's 5:00 somewhere.

that's good for those in booze. what's the company brewing up to keep the good times rolling? stick around to find out.

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is going to be great. which is one of the reasons why concerns about the chinese market, the ups and downs, and even if there was some uncertainty is not something we're particularly focused on. >> that's disney's bob iger making comments last night on "mad money." jim cramer is standing by. jim, what'd you think of everything that bob had to say on your show? >> look he is the most bullish i've seen him. i think that's because they've got "star wars." they've got "cinderella" this weekend. a seven-minute "frozen," a tease basically. but that's going to go well. but then you've got china. you've got another "avengers." they have so many brands they remind me of procter & gamble 20 years ago. literally. they're just developing a number of brands just right now that bob iger really has a path to really 2020 for earnings. >> wow. jim, earlier today we had the ceo of united technologies on. he's going to be talking to investors later today about his

potential plan to maybe spin off sikorsky what do you think about what he's saying? he thinks gdp right now and what we're feeling is better than 3% gdp as far as he's concerned which is pretty bullish too. >> first, i loved that interview. it was really important. i wish that everybody could see it. i think it kind of defines what we're really thinking. joe, you brought a lot of good stuff out. he can be a little old cfo. but the orders that's amazing. you get non-residential construction going in this country, you could see gains. i thought his european comment was constructive. saying you talk about a strong dollar. if the economy comes back in europe, we have 30% europe. it's going to be great. that's my takeaway. that guy's good. he's really good. >> always wonderful to see you. we will see you in a few minutes. >> i'm meditating. coming up abuse news with the ceo of constellation brands. we're back in a moment.

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lumber liquidators launching its counterattack following the withering "60 minutes" report about the safety of hardwood floridaing. a conference call over an hour from now. scott cohn live with advance word on what to expect. scott? >> the company has already set up a special section of its website, responding to allegations of formaldehyde in its flooring complete with a pair of slick videos. >> we didn't grow from starting a company in a pickup truck to being a new york stock exchange company by selling anything other than good quality product at a good price. >> that is founder and ceo tom sullivan. the company's already put out the agenda our products are

safe. that's the first item according to the company. we'll learn why they insist that is the case. next, what's causing the confusion? likely hear why the company's questioning the test method used by "60 minutes" and the state of california. we've confirmed that test procedure is not the same one that's required by the california regulations. you can expect the company to make a lot out of that. also hear how the company plans to take care of its customers in light of all of this. then, the call turns to business with an update on quarterly outlook and what lumber liquidators plans to do next. also the company's put out the slides it plans to use to accompany the call those slides give us another glimpse into what we might hear. one of the things that the company says it will do is offer free air quality testing. and it compares formaldehyde emission from lumber liquidators's flooring to other house old sources. does not appear the company will take questions but that does not mean there will not be plenty of

them. even if the test method is the wrong one, how does that explain the fact that lumber liquidators flooring tested higher than the competition's? and how does the company repair the damage to its reputation warranted or not? the public relations offensive then continues when tom sullivan appears first on cnbc tomorrow at noon eastern, on the "halftime report," with scott wapner. we'll be monitoring the conference call coming up this morning and details coming up on "squawk on the street." >> thank you for that. we appreciate it very much. we'll keep watching. are the stars aligns for constellation brands? the beer business has been a big, bright spot. the ceo joins us in a moment.eous 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

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constellation brands up over 166% over last two years outperforming almost all of its peers. joining us to talk about how business is faring ceo of constellation brands. i understand somewhat, i know the other day jim cramer talked about boston beer maybe getting hurt by kraft brands. you've got great brands like corona, et cetera. but what is the difference? you have been outperforming

almost all the other spirits companies, why? >> well, you know we're in fantastic categories imported beer is very strong especially our mexican portfolio. you mentioned corona. medello the second largest he import brand in the united states and growing high double digits. a fast-growing wine business with brands like robert mondavi and black box and dreaming tree. great growth and margins in our business. >> business is always -- if there's an interelastic business, it's booze. people will drink corona i know i am no matter what happens. rob, i will tell you, i get filled up now. i'm drinking white wine with my finger up in the air. should i be okay with that? >> hey, look i think that white wine is great.

beer's great. you know we've got a great spirits business. yeah you should be good with it. >> if you look into this powdered alcohol? you would have to as a company, just to consider that -- i mean it's weird, number one, when we heard about it. but i guess you'd be remiss if you didn't see what it's all about. >> yeah, you know we are, of course, have looked into it but we seriously doubt that it's going to become a mainstream or material part of the business. so i would say we're not very interested in it at the moment. >> the competition in the high-end spirits market how do you approach that, because it's crowded. is it all about marketing? is the product really different between a -- i hear people order a kettle one versus some other expensive vodka. i didn't think vodka tasted like anything anyway what difference does it make?

>> well you, know i think there's a lot of truth in that. our bran happens to be a premium product, but we call it a mid premium product. it now the third largest vodka brand overall in the united states and the second largest import. largely because it's a great value, swedish vodka, for the money. and i think consumers are realizing just what you said and, therefore, they're buying brands like svedka instead of more expensive. it's all the same in some respects. >> you probably talked me into thinking tequila could be different. there's different kinds. how's yours? how expensive is it? >> well tequila is different. there's a wide range of quality. ours is cassanoble, it is one of the highest -- best premium tequilas in the industry.

it has won a lot of awards and taste tests. and mixologists absolutely love it. >> all right. >> great product. >> rob sands appreciate. want to try all of those after the show. >> thanks for joining us, everybody. see you again tomorrow. ♪ >> good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber at new york stock exchange. after two days down for stocks premark's looking for some relief. dow futures up triple digit but was retail sales are not going help down for the third straight month. oil reeling from yesterday's sell-off, below 50 at the moment. and the ten-year yield has come in now below 2.06. road map begins with a pause in