x. >> good morning and welcome to squawk box here on cnbc facebook may soon be hosting material from news organizations. they have been holding talks with half a dozen media companies. a change could mean that users are able to get stories without tapping a link to go to an external site. more on this story in a little bit the markets did end weaker. we're talking down by 11 on the other. you can see the dow futures are indicated higher. 35 points right now above fair value. s&p futures up by 3 points and nasdaq up by 10. let's get to the big stories we're watching today. the consumer price index is expected to rise by .2%. that would be a relief believe it or not because we haven't

seen any innation as judged by the cpi since october. that number is due out at 8:30 eastern time. then later in the morning watch for the housing price index. new home sales and richmond fed survey. st. louis fed president gym bullard is set to start talking in london in a few minutes. in the meantime jon williams is in australia and he is telling economists there that the broad strength of the dollar poses little risk to the u.s. economy. gathering more momentum for what happens when rates start to move he warns of unintended consequences for the economy. given that monetary policy is a blunt instrument it's going to have unintended consequences or effects. the goal for me is just to get the economy back to full employment. get inflation back to 2% and interest rates back up as appropriate back to more normal levels. >> he will not be composing the music for the new movie. >> i thought he was.

>> originally he was signed on. >> he will not. we'll check into that. but i thought i saw recently he's not going to be. >> i'll look at that too. >> we're on a need to know basis. oil prices bouncing around this morning among the headlines, china's factory sector falling to an 11 month low. that sparks concerns about demand this is one of the times when the future's markets irritate me because we get down to 33 and then the future's contract rolls and it gets marked up to 36 i went to sleep

and i woke up and it was higher. >> you work so hard to get it under 45. >> it's right back above 46. >> it's 48 almost back to 50. where is he at? >> california. >> all right. do you remember those famous boston pops. >> no. >> all right we're going to talk about generation gaps in the chairs. i have an interesting study. when they talk about men, there's young men and then there's older men, guess where older men starts?

>> 26. >> yeah, 26. the year after 25. i read that this morning. stocks to watch this morning, whiting petroleum announcing plans to share $35 million in stocks. it wants to reduce debt from the december buyout of its rival. there have been rumors of late that whiting was considering a sale and chesapeake energy is cutting it's budget by $500 million. the firm sites weak commodity prices and carl icahn is increasing his stake by 7 million shares. fou now he's up to 73 million and the fda approving abiomeds. blood pressure pump system. bio marin and based in california which is the county seed of marin county. >> so is it bio marin.

>> okay. >> anyway this by the way is designed to maintain heart function and circulation during high risk procedures. >> by the way, older women probably start at age 21 right? it's probably even worse. >> i don't know. women just get better and better and better. >> well said. >> and they glow a lot when they're pregnant. >> well said. let's talk about financial news as well. regulators say the so-called living wills of three banks fall short. they're criticizing banks by hsbc rms and bnp. they focus on how it will go through times of crisis. >> in washington news broadband providers we knew this was coming have now filed lawsuits against the sec's recently approved net newutrality rules.

the new ones are in it's words arbitrary, capricious and an abuse of discretion. it violated various laws regulations and rule making procedures. better strap yourself in for a long fight on this one. we'll talk about it for years to come and congress is also trying to look at things too and they went e-mails between the fcc commissioner and the president and all kinds of different things to see how that happened. to see how that happened because i think if it walks like a duck talks like a duck quacks like a duck, all of a sudden he says we want title 2. >> we knew the industry would put up a fight about it.

we'll see where things head from here. in the meantime a check on the markets this morning. the futures are indicated higher this morning. the dow futures look about 40 points above trade value. at least at this hour there's green arrows there as well. the kacac is up by.5%. overnight in asia the nikkei was down by .2%. pmi, the purchase managing index showed a decline in china with the numbers we saw this. it was a worst than expected number. you can see the ten year note here in the united states right now yielding 1.916%. topped out around .2% and is still struggling below 2%. looks like the dollar is down against the euro and the yen. euro is trading and gold prices

are up by $2.80. joe over to you. >> joining us now with more on the markets and calls on china, europe and the price of oil is steven davis, ceo of signal investment research. good morning. >> good morning. thanks for having me. >> where are you standing just basically on valuation, i saw something yesterday someone wrote there's four words people worry about the most are now being used a lot for where the market stands. i don't think it is just historically the price to earnings multiple is that out of line but do you see signs at this point? >> yes if you look at valuations on price to sales on metrics that are not ips the market is at levels similar to where we were several years back. so the market is not so cheap anymore. >> you mean 2007 2008. >> yes, exactly. it doesn't mean it's going to two lower but you have to be a

little bit cautious here on the market. >> what does that mean? you don't put new money into the market? you're very selective on what you do? you wait for a pull back? how would you approach this? >> you look at sector rotation. we're going to talk about energy. we like energy so there are some places that you can put money to work. >> why ll right. so oil is going up quite significantly here. >> why. >> there are three key drivers of oil prices. the first is the global economy. we have a call that china is about to bottom in it's economy and the europe is get brgting better. so improving global economy would be good for the oil. the second is a supply response and demand response. as we get into driving season you should start to see if we use more oil and the third is the currency. everyone is positive on the dollar but we have another con

contrarycall that the u.s. economy is slowing. those will drive oil however there are two risk factors coming up in the next week. one is greece. and the last one is iran. if a deal happens with iran that would also be bad for oil. >> when you say rebound do you expect oil prices to bounce back to where in what amount of time? >> it's going to surprise people how strong energy and oil can be here. we would look for at least ten dollars here in the next three to six months but we won't be surprised to see it go back into the 70 or 80 or much higher. >> but your call is for oil back in the $55 range. >> no we actually think oil goes -- well that's wti. >> wti? >> yes we think it can go higher than that 60 plus. >> and 65 plus for brent. >> yeah. so we would expect -- assuming these two risks don't occur.

>> why would we put anything in the stock market then if we're going to get 50% in oil. why don't we buy oil futures. >> exactly. when the future is the shape of the curve. >> how long before we're back to 70. >> i think it could be pretty soon here. within 6 months. >> rarely do you have investment opportunities like that. rate of return is 0 and the stock market we hope for high single digits. slam dunk 55% over the next six months. >> that's exactly what i'm trying to tell you. the price of oil has come down 55% which is a huge amount for the amount that we're oversupply and people think it's just because we're oversupply but there's a lot of reasons why crude has come down so much and the factors will reverse. the fair price of crude or marginal cost is at let's say $80. >> where is is that the fair price? they can make it for $10 in saudi arabia. >> that's true but people don't realize that saudi arabia needs

the money to fund their programs so while they can produce it for $10 the reality of it is they need the money too. if you look at the five year budget you'll see they need the cash as much as we do. >> needing it and being able to institute price increases and allow them to do it are two different things and as far as production goes they're hitting an all time high again and because they're running faster and faster to try to keep up with what you're talking about right now. when they produce more to bring in the same amount of money that oversupplies the market. >> well if you hook at what they've done here it's actually really quite smart. if you're saudi arabia and you want to prevent investment into oil the best thing you can do is create volatility. oil takes years to bring oil online. so -- >> and you had another story in the headlines about another company cutting tap ex. >> i was watching yesterday just talking about how no real --

>> production. they're not expected. >> you're the second person -- or boone. >> boone pickens said the same thing. >> i believed someone on villanova too in the finals. but i'm going to mortgage my house and take oil futures. >> i'd recommend maybe an index because the futures have the shape of the curve as you pointed out. >> i want to take delivery. >> back the truck up to the house. >> i don't want the etf things. try and bribe a border guard with an etf. try to give him your statement after the zombie apocalypse. you need the physical gold. i want the oil to refine. >> it can be a great investment. >> why don't you think i can?

>> well it's actually not that hard. >> thank you. thank you for playing along. we'll see. that's what makes a market. >> it does. i don't want it to go back to 70. >> that's what makes big moves too is when the whole market gets lopsided and the conventional wisdom is oil prices are staying here for awhile. when we come back this morning forget the news fit to print. facebook users could get what they need to know without leaving the website. we'll have the details next. but first here's a look back at this day in history.

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

this would be a huge change for news organizations that always made money by keeping consumers in their own ecosystems. particularly now when pay walls are all the rage and you need to get paid for your content. if you're not only going to give

it away to facebook but not make anybody click through to your system you wonder how valuable that is or isn't for the news organizations involved. you get a big audience with facebook. >> i have a treat for you in chairs. >> cookies? >> no better better. i'm going to talk about smus and not the team that i picked that lost like an idiot. >> not where w library is going to be. >> smus. >> social media universe. it's a person -- do you know your smu? have you added up your facebook your twitter and instagram. >> there's a site that does that for you. >> do you know some of these big stars, some have an smu of 850 million. >> meaning 850 million people are watching them. >> no you add it all up. so what if you were going to be in a movie and you were rying to prepare people to get readtyy to

see the movie that would help. new media can help old media. >> facebook had 1.4 billion users. >> i still don't have facebook or instagram, it would have been nice if you said this could help you. >> it could help you. >> too late now. too late now for me. and we'll talk about that right over there. 850 million. do you know who it is? >> is it someone i would know. >> barely. >> i'll think about it. >> katy perry. >> no there's a big movie coming up. going to be the biggest movie opening ever in april. we'll talk about it. amazon twitch unit may have been hacked. the company is reporting unauthorized access to some of its user account information. just to be safe switch says that it expired passwords and

stream keys and disconnected accounts from twitter and youtube to protect the users. >> looks like a gaming site if i had to guess. >> it does. >> oh live streaming gaming. another thing i -- >> you do pree kwentfrequently. >> oh, look, it's your promo. >> coming up fast and furious the movie and the social media explosion. first though as we head to a break take a look at s&p 500 winners and losers. ♪

boy: once upon a time, there was a nice house that lived with a family. one day, it started to rain and rain. water got inside and ruined everybody's everythings.

the house thought she let the family down. but the family just didn't think a flood could ever happen. the reality is floods do happen. protect what matters. call the number on your screen or visit the website to learn more.

welcome back everybody. we're in chairs this morning talking about things that caught our attention. one thing i love about this business is how quickly stories can change. do you remember last fall we were running out of coco and chocolate and the plants couldn't produce enough and within 20 years we wouldn't have enough to keep up with the supply constant cocoa deficits. prices are down 7.7% this month. demand is down in the writes and asia. people are eating less chocolate. the ivory coast has gotten a lot

more rain so as a result there now on their 2nd bumper crop in a row where they're looking at much more than they ever expected. >> there could be a few year where is they have less rain and then they have more rain it keeps changing. >> everybody was scared there's not going to be enough chocolate left. we have too much. >> remember no more guac. >> and it reminded me of your efforts, turns out that was not the case. >> i was going to mention the craft cheese thing. john stewart decided the idea that this stamp of approval would go on kraft cheese so he set the organization that gave the stamp of approval is as much an organization as the single slices are cheese. >> he didn't grow up eating that either? >> i don't know but now they're looking into the whole whether there's money involved and because -- >> there's milk in every slice.

>> do you remember the fcc, net neutrality rules that john oliver did some -- >> yes and i was set up by a lawyer representing the comment companies. >> he has a show that was a joke. >> the john oliver thing but it was instigated by a lawyer. >> it's a comedy show. it's not real news. >> that's where a lot of people get their news. >> anyway i won say youth is wasted on the young but the young do control a lot. so fast and furious, it is a universal movie but it's number seven. it's a huge franchise for universal which is part of the family of cnbc and nbc universal but by all indications it's going to do some where upwards of 115 million in april. that should put it as the biggest opening ever and the reason they know about this is the merger between old media and new media in terms of social

media and right now they have incredible numbers like 91% of the people the total awareness among total audience 91% that it's coming out and with young men, charted at 94%, that's under 25. and with old men, over 25 it was at 93% but then you look at the three stars have the -- some of the highest news vin diesel jason statham and the rock. >> the rock is in it? >> the rock is in it too. you add up twitter, book and instagram. vince, vin diesel the social media universe stands at $865 million for fast and furious and vin diesel right now just on his facebook page, 86.7 million likes. >> so almost three times the population of the united states following these guys. >> it's almost ready made that

this is going to have a huge opening because of the awareness from social media and yesterday vin diesel or the day before had his third child, he and his wife or girlfriend. i'm not sure which but named her pauline after paul walker and i guess there's some viral video where he chokes up talking about paul walker. he's in this movie. so anyway there will come a time a couple of weeks from now where in the headlines you hear us saying -- we're going to say it. >> but we already know. >> we already know very likely what the outcome is going to be. >> i'm going to start boning up on my social media presence. >> are you going to start tweeting again? >> i don't know what i'm going to do. i'm going to do something. >> can i still beg. >> you can. it's @joe squawk right?

>> if you don't tweet they don't follow you. he said be careful what you tweet because sometimes if you tweet too much you turn people off too. >> where is he? >> he's still tweeting. >> not here. didn't workout well for staying here. >> no. but he's still tweeting. >> i want to stay. anyway, coming up go daddy ready to go public this week. did i tell you? i played a practice round at at&t. played 18 holes with somebody. ceo and founder of go daddy. he never told me. >> tint find out until later? >> didn't. good player. and the company is not alone. a new report out this morning on the state of the ipo market. becky is going to lead a dynamic interview with this person. we'll bring you the highlights, next.

will you help us find a house for you and your brother? ♪ ♪ ♪ ♪ woooooah you're not just looking for a house. you're looking for a place for your life to happen. zillow

welcome back. u.s. equity futures looking to get back some of the small losses we saw yesterday at the end of the session down around 11 on the dow. the s&p up a little under 4 and the nasdaq has indicated up 10. they managed to stay above 5,000 yesterday. making headlines, online video platform vessel launching it's paid subscription service today. it will offer programming at least three days before. the website cost viewers just $3 a month. it wants to grab video before it goes on youtube for free. think of it as similar to the way movies are released on demand before rearriving on cable.

the air force is to have spacex to launch military and spy satellites by june. they're getting the okay for the second stage engine and structure of the rocket. >> it's nearing all time highs but a story in today's wall street yournl says that industry wages have actually declined. the big reason is competition from foreign parts makers. the u.s. imported a record in car parts last year and that's up by something like $40 billion over just a few years ago. among our stocks to watch this morning take a look at business research firm ihs cutting it's earnings and revenue forecasts. it is amid a slump in oil prices and a stronger dollar. >> they don't listen to me. 2014 was the best year for ipos in over a decade but after a strong finish last year the first quarter of 2015 has taken a sharp turn lower with only 38

deals. that's a drop of almost 50% from a year ago according to the latest global ipo report. what is happening? what does it mean for companies that recently decided to go public? let's take a closer look at the ipo market with jackie kelly. in a nutshell i mean you said that you haven't been feeling well. is there any good reason -- any good reason why something would go down 50% year over year in what is at least perceived to be a frothey stock market. >> what does this all mean right? everybody is scratching their heads. at first look you think what does this mean? are the markets going down but in reality last year was such a great year. >> tough comparison. >> so it's a tough comparison. this is more similar to what we saw in 2013. i think a lot of us would like to see more activity. the question is why did this happen and a lot of this happened because it was such a great year. toward the end of the year i

don't know if y'all remember in october we had turbulence in the markets. there was a shake up and at that point all the companies in the pipeline pushed to get out. now what we're doing is rebuilding the pipeline. >> the other issue you have too is you mentioned volatility does a strong dollar effect things at all sf all? does that matter? >> i don't know the strong capital markets is what is very very attractive. while the u.s. had a phenomenal run in 2014 and we attracted more listings from around the world to the u. s. than any other destination we continue to see that even in the first quarter even though we're a little slower. now we're looking at 29% coming to the u.s. >> do you get the feeling that people watch the fed closely in this regard too. it's going to be longer before rates get back up there. this is going to be the time we have to get back out there before the fed does rate the rates.

>> definitely place if the market stability, right? so right now even though again we're sluggish in the start here all the positive signs really make the fundamentals strong to continue to get the market going. >> we have talked about potential bubbles when it comes to life sciences and areas. what do you think of that? is that true? >> i think there have been a lot of life sciences companies out there that needed access to capital that haven't had it. there's companies around 10 or 15 years that have taken advantage of this market. i think the investors are getting more disearning. >> when it comes to technology and the.com areas some of the social media areas that are out this, it's not the same. they don't necessarily need an ipo to get access to capital. the market structure changed too. there's a lot more potential before you get to an ipo. >> more and more we're seeing investors are interested in

getting to these deals earlier. obviously we have a lot of money sitting in private equity and venture capital. we have a number of exchanges that made capital available. lot of different options to your point. companies are getting private funding and continue to grow. >> how does that change when row start looking at years past and comparisons? is it going to be an apples to oranges comparison in the future or is that stretching things a bit? >> who knows. the great thing is there's so much entrepreneurialism happening right now a lot of companies are getting started. some of them we see five or ten years in. they're companies that ten years from now we'll say where did they come from. there is a lot of capital out there and available to help these companies grow. >> what is the -- you didn't -- with a would the biggest ipo

being bbe? uber would be -- we would beat that to death. squawk ally five days a week they would talk about it. they're not going to do it until they get a more permanent management structure or something. >> we haven't heard about any exciting ipos coming right now. obviously we have go daddy lined up and that's the start of some interest and will get our markets going here with great performance but it's a really good question. we're all waiting to see what it could be. >> is that what it takes to get an exciting company that people are focused on and then maybe the market is anticipating stuff like this? >> it does get some energy going. we've seen that with alibaba and facebook. they go to the market and get a lot of energy going behind them. >> thank you so much for coming in today. >> thank you. >> when we come back we'll have more of this morning's stocks to

watch. plus you can't dvr it. you have to watch it live and sit through the commercials. we'll tell you which companies are winning big this year when squawk box comes right back. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

friday night, buddy. you are gonna need a wingman. and my cash back keeps the party going. but my airline miles take it worldwide. [ male announcer ] it shouldn't be this hard. with creditcards.com, it's easy to search hundreds of cards and apply online. creditcards.com.

let's check on the markets

this morning. check out the futures which are indicated up a little bit. so far up about 37 points. the s&p up three and the nasdaq indicated up about 10. take a quick look at europe where we have small gain across the board except for in glees as that index is inching back toward the 800 level and finally a look at the dollar which has been a little weak. i'm sorry. energy is first. >> been a little strong. relatively speaking. >> right and now are we going to look at the dollar or not? anyway the dollar at this point is at 109, almost back to 110. going the wrong way. should be 100. >> unless you're manufacturing in the united states in which case it's a good thing. welcome back to squawk box. that was me talking but gm plans to make the next generation

cruze in mexico. they will take advantage of low labor costs and free trade agreements. >> brussels police arresting a taxi driver this week that confessed to taking part in several attempts at intimidation for those using uber. some involving the throwing of eggs or flour. >> who? the drivers or the passengers? >> i don't know but i thought it would be a little more serious than -- nobody likes eggs. especially if they're rotten or hard oiled. >> if it hits your car it can strip the paint too. >> yeah, strip the yellow off of those -- what are those things in new york now? who decided to order those things. >> you can see them from far away. >> they're hideous. >> the yellow cabs. >> there's one right there going

by. >> yeah, the bigger ones are okay because you can actually get wheelchairs in them. a story in the new york times today looks at the need for companies to adapt to uber and lift rides on the expense reports. but some people say that they are justified by quick pick ups. >> and a lot of buzz this morning about an op ed in today's new york times. angelina jolie continuing to inform women about medical procedures. she provides an update to her fight against cancer that effects women. in the article she says she underwent surgery to have her ovaries removed and two years ago she underwent a double mastectomy to prevent breast cancer. there's a certain gene. >> both her mother and her aunt

passed away because of it. >> by sharing her story jolie hopes to empower women to take control of their health and learn about all the treatment options. obviously she will not fall prey for the rest of her life to either of those forms of cancer and that's a choice maybe people should be made aware of. if you have young children or whatever to put that aside and know that you had a predisposition to it and now it's absolutely not going to happen. that's something people should have a choice in. the final 16 men's ncaa basketball teams face-off thursday and friday and the big winner the advertiser joins us now with more. 25 year high. the only thing i ask was 25 rears ago they had -- i guess it's the overall rating. must be more total, right? >> more total, right. every year the total goes up. you're looking at 181 million people going to be watching the tournament in some fashion. these are almost like the fast and furious numbers you were

talking about. remember you were talking about the social media impact and the visibility of who is aware of the different actors and the movies, that's the same thing with the advertisers here. if you look at the official sponsors like lg and at&t and capital one, look at nabisco. they're looking at social media traffic and engagement because of the tournament but if you look at the overall brand awareness, not just social but everything the big winner is buffalo wild wings. if you watch a tournament every commercial is a buffalo wild wings commercial and they have the good association with the overall tournament. every march in the last ten years their stock out performed the s&p 500. >> is that because of sales or people are buying stock because they see the commercials. >> people are buying the stock because they think sales will go up. >> are they right?

>> that's unclear but they have done a good job with march madness. that's interesting. the most compelling point, $.1. $1.1 billion. that's the total amount sold by commercials commercials. the championship game will cost $1.5 million which is on par with the afc championship game. this is the most expensive. it's bigger than baseball and basketball. so there's i lot of money to be had here and what is the most interesting of all is the amount of engagement and awareness the big companies are having they're not even the official sponsors. think about nike and samsung. they don't sponsor ncaa in an official way but flood the marketplace with so many adds that you associate them with march madness more than the other companies who pay the ncaa an official sponsorship fee but don't get the same value for it.

>> do you think it's enough for the kids to know they have a great future possibly in the nba. >> the 1% of them that will make it to the nba. >> what about the rest? >> that's what goes to the this really an amateur sport? if they're making more money than the nba playoffs what does that tell you? >> now we have the football that will be huge money also. so it makes you wonder. >> it definitely make youss you wonder. >> their families get to come and stuff like that. >> but if too many people come then you get in trouble. so there's so many little risky issues there on the rules. >> so were you surprised when ucla won that first game and then even more surprised -- this clown -- you picked them to win it all. >> i'm taking a risk. >> i'm ready for anything. >> i'm taking a risk on this. >> everybody else said they shouldn't be in the tournament.

>> i was shocked. they get a goal tend free which i've never seen. and walk into a 14 seed. here's the most interesting stat from twitter. if you count up the positive mentions over the course of the regular season of each team they can pick 80% of the games accurately. they had ucla going to the sweet 16. >> that makes no sense. just because of positive mentions they think the team will actually do better? >> they've picked seven of the eight final four teams the last two years. their bracket is in the top 2% in the world right now. >> and it's simply based on positive mentions? >> the total count of positive mentions over the course of the whole season. you ignore negatives, neutrals. and don't just focus on the last couple weeks. so there's something to be said there. >> i'm skeptical. >> there's something about the wisdom of the crowds. but they had ucla going through. it's not just me who thought they were going to make it to the sweet 16 but the entire public thought they would make

it to the sweet 16. even though we didn't know it. >> i didn't think so so i must not be part of the -- >> how do you feel about your bracket? >> horrible. i mean, i've got -- what? i've got ten teams in the final 16 but only two in the final four. >> there's a narrow path but you can still do it. >> someone said the perfect thing would be xavier wins it all. i don't even have them but that would be -- i would be happy. because i went to st. xavier high school. that's the college prep to the university. >> villanova was a risky team. they could have won it all. they shoot a lot of three pointers. >> what gets me because i watch the bear cats too. great defense. but a lot of times they just -- they go through these scoring droughts. they were as bad as any team with three pointers. >> which is why ucla got lucky.

bryce got 9 out of 11. >> so kentucky still, you think? >> well kentucky versus ucla is my final bracket. you've got to take a risk. i'm not going for this middle of the pack. >> i didn't either because of you. and i wish i had. i listened to so many different people. >> you've blamed everyone who's come on set. >> i know. >> take personal responsibility joe. >> it's my own fault. i took the wrong state. iowa state instead of wichita state. >> eric, thank you. >> thank you becky. seaworld has a new ad campaign. the company is trying to defend itself and build back support after a critical 2013 documentary led to declining revenue and park attendance. the new youtube campaign shows videos of behind the scenes caring for marine mammals by the country's veterinarians. and google preparing targeted ads for television. it wants to push tv ads aimed at

viewers locality and habits. new medical report getting buzz this morning finds that more than half a million americans will develop alzheimer's disease this year. here's the new part. as many as half will never be told their diagnosis. doctors are said to be reluctant to give them that bad news. or they fear that they won't be believed. all this is coming from the alzheimer's association, all these comments. and san francisco fed president john williams is in australia today. he's telling economists that the broad strength of the dollar poses little risk to the u.s. economy in whether it gathers more momentum. as for what happens when rates start to move, williams warns of unintended consequences. he says given that monetary policy is a pretty blunt instrument, it's going to have some unintended consequences or effects and the goal for me is just to get the economy back to full employment get inflation back to 2% and get interest

rates back up to more appropriate normal levels. and that would be the goal something similar to that. let's tell you about a few stocks on the move this morning. whiting petroleum announcing plans to sell 35 million shares of common stock. north dakota's largest oil producer wants to reduce debt from its december buyout from rival kodiak oil and gas. there were rumors whiting was considering a sale. and chesapeake energy cutting its expenditure budget by $500 million. it's the latest in a number of firms that are doing this. it's citing weak commodity prices as a reason for it. and carl icahn is increasing his stake in chesapeake. also the fda approving a biomeddings miniature blood pump system. it is designed to help circulation during high-risk procedures. news just coming in. nbc news reports that a german

a-320 has now crashed in france. it was traveling from barcelona to dusseldorf. this is just breaking at the top of the hour. also coming up deutsche bank's david bianco and ed keon. plus are fannie and freddie in serious trouble again? and could the taxpayer be on the hook for another bailout? one watch dog fears yes. we'll ask the head of the mortgage bankers association if the threat is real. as we head to break, see if the futures are holding up with all this happens. "squawk box" will be right back. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪

the answer is yes, it can. so, the question your customers are really asking is can your business deliver? hey mom, you want to live by the lake, right? yeah. there's here. ♪ did you just share a listing with me? look at this one. it's got a great view of the lake. it's really nice mom. ♪ your dad would've loved this place.

you're not just looking for a house. you're looking for a place for your life to happen. zillow ♪ ♪ ♪ (under loud music) this is the place. ♪ ♪ ♪ their beard salve is made from ♪ ♪ ♪ sustainable tea tree oil and kale... you, my friend, recognize when a trend has reached critical mass. yes, when others focus on one thing you see what's coming next. you see opportunity. that's what a type e does. and so it begins. with e*trade's investing insights center, you can spot trends before they become trendy. e*trade. opportunity is everywhere.

swings in oil prices from speak to saudi production. why crude is a big mover this morning. the health care law turns five but remains a hot potato. we're told how the industry has changed in the last five years. and taco bell for breakfast? capturing 5% of fast food morning menu in just a year now they're set to take the wraps off a biscuit taco. we're getting the first look.

a hot and spicy second hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with becky quick. andrew is off today. there is some breaking news coming from across the atlantic and confirmed by nbc news. a german wing's a-320 aircraft has crashed in france. the plane was carrying up to 150 people according to the french prime minister who said all are feared dead. we will bring you updates as we get them. among some of the other stories we're watching this morning, crude price is on the move. crude oil dropped after it fell to an 11-month low. and crude production was close to an all-time high.

oil prices have reversed in the last two hours. they are up by just over 1%. that's a gain of 48 cents to $47.93. in some of the other headlines this morning facebook wants to host material from news sites. that means users could read about news without clicking to leave the website. they always made their money by keeping consumers in their own ecosystems. so it would be a boom for facebook to have that and still keep track of all those people. we have closely watched economic data today. the consumer price index is expected to rise .2%. that number is out at 8:30 eastern time. if we see some inflation in that number, it would be the first time since october. and san francisco fed president john williams is in australia. he is telling economists there the fed should wait no more than a few months before considering to raise interest rates. he says he sees a safer course in gradual raises.

williams has always been seen as one of the more dovish members of the fed. he says the broad strength of the dollar poses little risk to the economy gathering momentum. also richard fushisher telling cnbc they could begin raising rates. he stepped down last week and was appointed to pepsi's board of directors just yesterday. investors are going to keep an eye on key rates. talking about the implication about the fed and the markets here with us david beaonianco and ed keon. i was struck yesterday by comments in a "wall street journal" piece just talking about one of the risks of being where we are in terms of interest rate is that we have seen at this point the private sector dynamism that comes from

pricing from supply and demand has been taken away so that the people that have been accruing all the benefits are big companies, wealthy people. and that you're not seeing the normal type of activity. that's why in the recent fed statement they went down again to 2.5% for -- here we are again. sixth straight year of below-par growth. instead of says the fed saved the world, this is another gentleman making the case the fed is one of the reasons for the slow growth. ed? >> i don't buy it. i have a different point of view. i think that interest rates are low not just because of central bank action. that's the most important thing. don't get me wrong. but also i think there's a supply and demand mismatch. people are looking for safe returns and they're having a hard time getting it. so i think central bank policy is a big driver of where we are. but it doesn't explain why

interest rates today are the lowest level they've been in 500 or 600 years of recorded history. central bank very important. but i think we're still in a relatively slow global growth world where there's still a lot of anxiety arising from the financial crisis which is keeping people cautious about investing and spending. >> they have records for 500 to 600 years? >> yeah. the dutch and other markets have records like that. >> and we have never seen global rates this low? >> never. >> here's a couple of comments david, you can respond to. so the mean income for households was $56,000 in 2007. it's now $52,000. near-zero rates and the fed's rapidly expanding regulatory control of finance have put the fed at the center of capital allocation. that has caused credit to gravitate to well established borrowers like governments and large companies at the expense

of savers and small borrowers. >> we can all agree it's been a subpar recovery. and i think what the fed has done has been more for main street than wall street. i'm with ed on this one. >> how's it been more for main street when i told you income is down? >> the whole economy could have been worse. >> counterfactual. how do you know it couldn't have been better? >> i'm agreeing with the idea that either which way you look at it the recovery has been subpar and disappointing. interest rates still surprise us as to how low they are particularly at the longer end of the curve. this is not just central banks in the world. we seem to have the leading u.s. interest rates down. and there's a dichotomy between the short end of the curve and the long end of the curve. we think the fed will hike this year because of a tightening

labor market bring further dollar strength keep u.s. inflation low. probably lead to a flat curve. >> well that -- don't flat curves normally press into slowdown? >> that's been the signal in the past. >> what are we going to use to jump start the economy if we're already at zero? mr. positive. all-time highs. different this time. >> i think we are going to have relatively slow u.s. and global growth. because frankly population growth is older, a lot of us are getting older. but it doesn't mean we can't have a robust growth in income finally. this is the first year you're going to see a bit of a shift that mainstream is going to feel a bit more out of this recovery than wall street has we did a piece a little while ago that argued that the wage number we all focus on for wage growth is somewhat held down or officially by baby boomers like us leaving

the labor force and being replaced by less expensive new workers. that's skewing the data a little bit. i think the typical worker who's in the middle is probably seeing growth more like 3% or 4% or better than that. that will eventually maybe put some inflationary pressure. i don't think it's going to happen this year. i think that's more of -- >> being used to rationalize everything. the baby boomers are leaving the workforce, so that's why -- >> it's all about us joe. it always has been. >> that's why participation rate is -- >> except the generation behind me which are the new locusts. >> you've got to be a baby boomer -- >> i have a cottage near arthur fiedler. >> you know of him? >> no. >> thank you. what does that mean for the stock market if you're looking at potential wage growth? >> i've been pulling money out of the united states and investing more money in europe

especially in ways where we hedge the currency risk. so i think in essence the big three things i think are driving the markets is growth is scarce people are still nervous in demographics. so growth is scarce. everybody wants to get growth. so we're having a very gentlemanly currency war. so the united states is giving up a little growth so europe which really needs it is going to grow a little bit faster. also we don't have exports as a big part of our economy unlike them. i think you want to go where the growth is. and also if you look at u.s. stocks versus european stocks you have higher valuations in the united states. and earnings growth this year is probably going to be around zero. looking more at 6% or 7%. >> when you look at european stocks and if you invest in them with a hedging strategy to account for a stronger dollar how much can you expect in

gains? >> well, just this year alone already it's not even three months in, the euro stock is up about 16%. if you don't have the currency downdraft, it's been a great place to be. >> do you expect those type of gains to continue? >> no. nothing grows at 16% in three months. but i think you will see, perhaps, another 5% or 10% out of europe and less than that out of the united states this year. sfl less than 5% potentially in the united states stock market this year? >> we've had about 3% in the bag. i think if we get around 8% 12% that will be a good year for u.s. stocks given you had zero earnings growth. so the only way you're going to get growth is stock prices if valuations go higher. i think that will happen because if interest rates are so low, but they can't stay into the future. >> that's the first time i've heard you say that. >> this is the first time we've really take an little money off.

we're still overweight the united states don't get me wrong. but not as aggressively as we were. we moved that money into europe and a little into japan. >> we argue it takes pe expansion. we think earnings could be flat this year. the pe expansion is dependent on long-term rates staying low even as the fed hikes. so by the u.s. for tech and health care, look for things like european industrials and just lower your expectations about how strong of returns you're going get. >> okay gentlemen. thank you. we appreciate it. we keep hearing more about this awful situation over in france. an update now on the plane crash in france. it was a germanwings a-320 aircraft and it crashed in the french alps. the french president says likely no survivors. it was traveling from barcelona to dusseldorf. the pilot made a distress call. 150 people according to the french prime minister who said

that all are feared dead. we will bring you more updates along the way as we get those as they're trickling in. when we come back this morning, earnings for fannie and freddie plummeted last year raising questions about the need for additional taxpayer money or the government's intention to wind down. then house democrats releasing their budget proposal. representative chris van hollen will join us to break it down. and getting new items from taco bell. a look at the biscuit tacos. stick around. "squawk box" will be right back. every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. which leads to better decisions for our clients. it's a uniquely collaborative approach you won't find anywhere else. put our global active management expertise to work for you. mfs. there is no expertise without

collaboration. hello. i am a fully automated investment advisory service. i can help you choose investments. monitor them. and rebalance your portfolio. i can do a lot of what humans can. except have a real conversation. if you'd like that, you can always speak to someone at schwab. they aren't algorithms. try not to hold it against them. say hello at intelligent.schwab.com

welcome back to "squawk box." futures at this hour have been sfr most of the morning up 20 and 30 points. now up 23 points on the dow. this morning up just a little under 2 points on the s&p. 6 and change on the nasdaq. or 7 now after some weakness yesterday in the dow. very little. >> it was little. 11 points or something. fannie mae and freddie mac fell by over 80%. raises the question of whether they're another bailout on the horizon. and how the u.s. taxpayers would react to something like that. joining us now is david stevens

he is president and ceo of the mortgage bankers association. thanks for being here. >> good to be here. >> so fannie and freddie have been placed in conservatorship and 2013 was a great year for them. they gave billions of dollars back to the u.s. treasury. 2014, not so great. there is an issue where they have to draw on the credit lines of the treasury if they fall below a certain threshold. >> that's right. if you think about the earnings unheard of with any in the world. those at one times were asset recoupments. and recoupments of reserves, legal settlements, those types of things. what we saw in the last drop was what we think will be returning their levels would be. that's certainly not sustainable for two companies that have no capital and are dependent on the lines of credit the treasury department holds. >> we know this was kind of i

guess, kicked into purgatory at some point. nobody wanted to deal with it. however right now they are still if you look at the gses they are responsible for 60% of mortgages. >> look the challenge with bringing the private market back is a lot broader and deeper than can be solved by any single. the challenge is in conservatorship. there hasn't been any deliberate efforts in a bipartisan way to make sure we have a system that's sustainable. under the existing agreements they will wind down their capital to zero. so we have trillions of dollars of exposure no capital on the balance sheet, and two entities that really literally finance a vast majority of america's housing. >> i know that 60% sounds incredibly high and it is but it is improvement over where we were a few years ago where i think it was north of 80%.

maybe even 90% at one point. >> absolutely. between fannie and freddie and what comes out of the programs, there's still a big number by federally backed lending. but we are seeing some private capital come back into the market. mostly balance sheet lending typically to wealthier clienteles. they're still highly dependent on a freddie mac or fannie mae product. they've had such a terrible experience in this last recession and through legal settlements and regulatory reform et cetera there's a real resistance for coming back for anyone who might pose any credit risk. >> the banks worry even if they make the loan and someone defaults on the loan, they won't be able to take the house back? >> absolutely. it's not only take the house back. if they make a minor mistake in

packaging that file. if anybody's got a loan today, they know the process. it may be 500 pages thick by the time it gets to settlement. any error could be a problem for repurchasing that mortgage. the bank may have to defend the fact that was still a good loan even with a minor error in the file. they're afraid to take a loan with any risk in it at all. between the regulatory oversight and the cost of capital and concerns about repurchases and indemnifications, dependence on companies like fannie mae and freddie mac remain high. >> if you don't have a credit score of at least 650. >> well into the 700s. most lenders have minimums of 640 and above. we're doing better credit quality loans today than before. but the real question is what

happens if fannie mae or freddie mac need to draw on a quarter. we find ourselves sort of in a crisis management scenario where we're over-responding to a market correction event that could be quarter by quarter. >> so what do you think the answer is? >> one is they have to legislate. they sit in conservatorship. the only way to reaffirm their role formally is through congress. but there are short-term steps. >> there are plenty of people in congress who say the government shouldn't be involved in this business to begin with. so what solution are you seeking from congress? you want things to go back to the way they were? >> no i don't think there's any way to go back the way they were. but there is a role to make sure there's continuous market liquidity for housing finance capital. fannie mae and freddie mac serve an important role it's to make sure they don't go back to pre-crisis risk taking.

there are regulators taking steps in that regard. but ultimately congress is going to have to decide will there be a role for government-backed housing fans. and this country has always depended on some level of government financing. because we know in recessionary periods, capital exceeds markets. how do we make it sustainable over the long-term? >> right now home ownership was peaked over 69%. what's normal? >> that's a great question. everybody wants to know. the homeownership for african-americans and hispanics is below 50% today. we're about 64%. the question is with the demographic way of coming towards us in this younger generation, this millennial generation, it's much more diverse. knowing where this is going to level off is difficult. we think it will level off

somewhere north of 60%. it's just a question ultimately of a lot of these questions about housing policy what finances is going to be available, how difficult will it be to buy a home. there's all those kinds of variables. >> thank you for coming in today. we do have an update for you now on the plane crash in france. as we told you earlier a germanwings a-320 has crashed in the alps. it was traveling from barcelona to dusseldorf. francois hollande said there were 150 people on board and there are not blooeed to be any survivors. it happened in a part of the alps that is hard to get access. we will take to an aviation analyst a the break. >> and germanwings --

can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?

all right, folks. take a look this morning after a slightly lower day yesterday for the stock market you can see this morning there are some green arrows. dow futures are indicated up by about 36 points above fair

value. the s&p futures are indicated up by just over 3 points. and the nasdaq indicated up by 10 points. we've also been keeping track of what's been happening with oil prices today. oil prices initially were lower after some reports that saudi arabia was at about the peak production they've seen. this morning the price of wti has come back slightly. right now it's up about 22 cents. also look at what's been happening with brent crude at $56.13. wti at $47.69. and our developing story this morning details continuing to come in on that crash of the germanwings a-320 in the french alps. joining us on the squawk news line aviation expert michael boyd. i'm sure you know germanwings, but it's a wholly owned unit of leftansa which handles all of the short haul flights for that

airline. have we got that right? >> there are subsidiaries. they own a number of carriers. this is one of the budget carriers that was going to barcelona so you're talking about probably a looser travel. probably vacation travelers. >> okay. and at this point we hear that there was an s.o.s. call. that's all that we know. there was a distress call. impossible really to conjecture about anything at this point. i'm sure you'd be unwilling to make any type of guesses on what happened here. >> yeah. i won't. there hasn't been any known problems of germanwings. i can't find anything. but this is so rare it's one of those things that catches us all by surprise. >> and we know about air safety in the united states.

i don't remember the last fatality on a large commercial flight. it's been years and years. we kind of have the same feeling about western europe as well. i mean very safe to fly over there in recent years. >> absolutely. it's just as safe as over here. a lot more crowded, per se. but it's as safe as any system in the world. >> michael, the a-320, i don't want to just rely on my memory but have there been -- i mean there's been a couple of things that they've checked. i don't think there's been any incidents, but there's been a couple of things that they've checked on the a-320 in recent years, hasn't there? >> well it's an airplane that's been out for about 30 years. a lot of things have been worked through. there hasn't been anything untoward the number series. it's a very reliable airplane. there's been nothing indicating any issues with it.

>> nothing in recent years whatsoever. i thought i remembered some issue of some sort but maybe -- i'm not an expert on it. >> there have been issues where, for example, there was a new zealand airplane on a test flight that had a crash due to some icing problems. these are things that normally due to things other than the inherent design of the aircraft itself. >> okay. all right, michael. well, if you hear more check back with us. we appreciate you coming on so quickly on this. we're right in the middle of you know, it's a developing situation. so we appreciate it. thanks. >> not a problem, sir. when we come back this morning, budget battles are shaping up in congress. representative chris van hollen will join us next. why he says the gop budget wouldn't balance under enron accounting rules. right now, though as we head to a break, take a look at the u.s. equity futures. dow futures up by about 38 points.

over 20 million kids everyday in our country lack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy affordable, kid-inspired chef-crafted food. we looked at what are the aspects of food that will help set up kids for success? making sure foods are made with high quality ingredients and prepared fresh everyday.

our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. we are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. until every kid has built those life-long eating habits, we'll keep working.

welcome back to "squawk box," everyone. in our headlines this morning, mccormack posting better than expected earnings in revenue but the company cautions the dollar is weighing on sales growth. regulators say the so-called living wills of three foreign banks fall short. the fed are criticizing plans by hsbc rvs, and bnp paribas. plus chesapeake energy carl icahn is increasing his stake to 73 million shares. good news for nfl fans. the league is suspending its tv blackout policy for the upcoming season. previously a game would not be seen in the local market if it wasn't sold out at least 72 hours before it started. teams voted to suspend blackouts for a year and then evaluate the policy after that. >> just a way to make sure the

tickets sell out, the stadiums sell out, the owners make their money back before it goes to tv? >> right. >> i guess there are some -- maybe miami who's had troubles with that? >> this is for faithful fans anyway. you figure if a team is contending, it's going to be sold out. so the teams that aren't contending that you don't want to watch anyway. no one's going 72 hours be fr. you know that i'm not watching. i won't watch the bengals anymore. >> you will when they start winning. >> no i won't. nope. this is a divorce. i'm not going to get remarried. >> yes, you are. how long have you been a fan of that team? >> since they started. >> okay. so -- >> since paul robinson rushed far thousand yards. >> i do not believe that you can give up on them. >> since greg cook was drafted from university of cincinnati. >> see, you are a true fan. >> no, i'm not. >> yes, you are. >> true fans have feelings too.

you look at the owners and how they manage the team and say as long as this person is the owner, i'm not going to be a fan. zplp you're still a fan and you'll be back. >> true. anyway it has been five years since the start of president obama's affordable care act. joining us this morning to talk about the changing face of our health care system is dr. toby cost cosgrove. great to see you this morning. >> good morning, becky. >> we are five years in. what kind of report card would you give? where do we need improvement and where are we doing well? >> i think we've seen a number of changes, certainly access has been improved. we have 14 million more people covered across the country. we're beginning to see the shift on how we get paid going from fee for service to actually measuring outcomes and you get paid if you do well. the second thing -- the third thing is that we're seeing improved access. and more and more people are

moving to being outpatient patients instead of inpatient. and so you're seeing more and more opportunities of huge growth in outpatient visits across country going up 5% or 6% each year. so major changes and in order to accomplish this we have to make care more affordable. so we have works very hard at reducing our costs. we took about $500 million out of our costs of running the cleveland clinic over the last couple years. >> how do you do that without affecting care? >> one of the great ways we've done it is we put together care pass. care pass do a couple of things. they standardize how you're going to look after somebody. that reduces the variation and cost as you do that. so you get better quality at the lower cost. so we're seeing that in multiple different procedures. we've got about a hundred care pass organized across our

institution. so it's a significant change in how we look after people and how we make care much more affordable. >> toby, i know the cleveland clinic is a unique place. there aren't too many hospitals that are doing things that are quite as innovative as the cleveland clinic is known for doing. when you say doctors are now getting paid for outcome, i know none of the bills i pay have changed. how widespread is this across the country in. >> it's changing slowly across the country. but the emphasis is going to be more and more in that direction. we have quality metrics so we report to the government and that determines our pay. and increasingly the pay is judged on the basis of the quality that you do. we report about 115 quality metrics to the federal government each year. and theorizing gradually. >> is that a good thing or bad thing? speaking from a hospital

administrator who's there, these are a lot of things tough improve on. but is it too much? >> well i don't think it can be too much. i think what we want to do is get the outcomes that we report appropriate. and in the past a lot of them didn't process. in other words did you give the aspirin when somebody went to the emergency room and now they're about actual outcomes and measuring outcomes. and you know measuring outcomes is a difficult thing to do because it varies on the sort of patient you're looking a. so we're getting increasingly sophisticated on how we do that. and the risk factors are taken in. some patients are easy to take care of. some are very difficult to take care of. but this is an evolution. and health care is evolving very rapidly across the united states. we're seeing tremendous innovations going on all the way across the health care system. it's a huge change. >> let's talk about some of the outpatient versus inpatient care. on the one hand it's great. if you're somebody who's sick and if you can get out of the hospital and get home you

probably prefer to do that. although i do have concerns sometimes that patients are pushed out of the system a little too soon when they're not ready to go home. how do you balance those? >> it's difficult. on the one hand we want to get people out of the hospital. on the other hand we are penalized for readmission. so we are being very careful about not pushing people out too soon. because we don't want them to come back. the other thing we're doing is really very interesting. improving access. we've done this in a number of ways. you're seeing more and more urgent cares. you're seeing more and more opportunities for making point in times. we see about a million same-day appointments. and 98% of people who ask for one get one. we're increasingly beginning to do things like have virtual visits. so ultimately we are heading toward looking after people any time, any where. and this is a big change and rather than having to make an appointment to see you doctor.

>> i like the virtual visits. it's something they offered up at our workplace too. the theory is you don't need to see nn in person. >> we're doing this for post-operative visits. and something called l sot which is like an over-grown photo booth you can go into and there's a caregiver on the other side of the screen. you can see them and they can see you. we're putting them in college campuses and pharmacies. and increasingly you're going to find a lot of different locations you can go and get your primary care. this is getting more and more sophisticated. >> although, the idea of a photo booth that only sick people are sitting in i'm a germaphobe but are you going to want to sit there? >> you wipe it down between patients. >> certain things will require face-to-face or some type of meeting. zplp absolutely. >> i wish it was all virtual. most of what happens in any

doctor's office, i could do without. but are you prepared for an adverse supreme court ruling? the reason i bring it up i just read a piece of anthony kennedy talking about something totally unrelated, budget issues but some people think he may have tipped his hands that he may be going for the plaintiff and saying we don't need to figure what congress intends here. what happens if that comes down as a negative for obamacare? >> i don't believe we can predict what the supreme court is going to do. they surprised us last time with their decision. i think they may surprise us again this time. and until such time as we have a change by the supreme court, we are going to continue down the path because this is the law of the land and we have to implement it at this point. and that's a big task. we'll have to wait and see. >> all right. appreciate it. there's curtains on that booth, too, i guess, right? i don't know. what would you be looking at?

>> it's a closed booth. and you look at the provider. this is clearly not a booth that you're going to wind up doing neurosurgery in, but certainly there's a lot of things you could imagine like looking at a rash, sore throats, ear aches, all those sorts of things. >> all right. some kind of mole or something like that maybe. that makes sense. all right. >> absolutely. >> okay. good. all right. >> thank you, toby. great talking to you. >> very nice to talk to you. >> see you, doctor. breaking news out of europe this morning. a passenger plane crashing in the french alps. nbc's tom costello joins us with the latest. >> this plane wasdusseldorfs. what happened is at about 10:00 or so local time we're told this plane went off radar. there had been a very rapid descent from something like 38,000 feet down to about 5,000

feet. and actually the crew got uf an s.o.s. message. this is extraordinarily unusual to have a plane go down at altitude. normally the vast majority of incidents involving aircraft occurred when on takeoff or landing. you can see right there where we believe this plane -- actually you can't see it. but over to the right we believe this plane went down north of niese off of the french riviera. and we are also told that there are no survivors according to french rescue. what i was suggesting here is that the authorities are saying listen, we don't know why this plane went down at altitude but it is extraordinarily unusual to have a plane go down in what is supposed to be the easiest part of the flight. when you're literally cruising at altitude. so the immediate concern would be obviously not just losing one engine but the possibility of losing two engines because most aircraft can fly quite well on a single engine if necessary. a breach of the hull would be a

possibility of the fuselage having a rapid and cataclysmic event that would have caused a decompression event. you've also got to be worried about a possible criminal event. so very early in this investigation. rescue teams are not even fully on the scene yet. but we do hear from the first teams on the scene that it does not appear that there are any survives and the concern is that this plane was descending so rapidly, 38 down to 5. normally if you have a decompression event, guys the pilot would try to get to 10,000 feet and then stabilize at that point. the fact this plane continued to drop very dramatically would suggest that they were simply not in control of whatever was happening. >> i wonder -- an s.o.s. call, a distress call, that would be verbal. is there something that we might find out that the pilot said? >> we're led to believe this may have been an automated

transmission. normally what happens is if you have a problem, the cockpit is going to say air traffic control, we've lost an engine we lost the right engine and we're descending. we need emergency landing wherever. the fact that it appears that that did not happen is also concerning here as well. the airbus a-320 is a workhorse. more than 30,000 have been in service around the world. it's a heavily favorited plane in direct competition with the boeing 737. the a-320 was the first to go with this heavily automated computer assisted technology that's designed to ensure that the plane is always flying in an appropriate configuration. in other words, it doesn't allow for a lot of flexibility on the part of the pilot which some pilots have not -- you know, they kind of have chafed at.

but the fact this plane has such a good track record around the world and goes down is clearly a concern. >> i'm trying to remember the latest issue. the december 28th air asia was flight 320, wasn't it? >> it was. >> what happened to that? did we ever figure that out? >> that plane was flying into what we believe was just a horrendous weather pattern. >> right. there were a couple last year. we were trying to keep straight which is which. >> this was the one over christmas time you may recall. yeah. so the plane was in a horrendous weather event. and the leading theory had been that it's possible that the crew may have gotten bad data from their tubes, their speed tubes on the sides of the aircraft. they iced over. it's possible that that fed bad data into the plane. now, normally a cockpit crew would say that's all right, keep it stable. keep it steady and we'll fly

through this and figure what happened on the other side. but if in fact the crew kind of lost it. if they immediately pulled up on the yoke they could have stalled the plane. that's what they believe happened to air france 447, of course that went down between brazil and france about four or five years ago now. >> right. all right. a lot of info from you, tom, on this. appreciate it. thank you. >> okay. take care. coming up a budget battle shaping up in congress. representative chris van hollen joins us next. why he says the gop budget wouldn't balance under even enron accounting rules. so it's nice that there's no hyperbole being used here on either side. when we return. so what's going on today?

news alert! message! email! calendar update! most of us admit to being overwhelmed by information at work. that's why ibm created verse. it uses powerful analytics to uncover hidden patterns in your email, calendars and social feeds. it continuously learns how you work. and helps you prioritize the people and projects you need to focus on. there's a new way to work and it's made with ibm. ♪ ♪ ♪ (under loud music) this is the place. ♪ ♪ ♪ their beard salve is made from ♪ ♪ ♪ sustainable tea tree oil and kale... you, my friend, recognize when a trend has reached critical mass. yes, when others focus on one thing you see what's coming next. you see opportunity. that's what a type e does. and so it begins. with e*trade's investing insights center, you can spot trends before they become trendy. e*trade. opportunity is everywhere. opportunities aren't always obvious. sometimes they just drop in.

cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

let's take a look at a couple of stocks to watch this morning. estee lauder upgraded. the analysts point to a couple of factors including accelerating growth if the u.s. and also in emerging markets. and kimberly-clark was upgraded as well at wells fargo. the firm says the stock's valuation remains between 117 and 120. the fda approving abiomeds.

it is designed to maintain heart function and circulation during high-risk procedures. and coming up he's still a congressman, chris van hollen running for senate as you know. he will join us on the budget battle in congress. and we'll be right back with congressman van hollen. there's nothing more romantic than a spontaneous moment. so why pause to take a pill? and why stop what you're doing to find a bathroom?

with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision or any symptoms of an allergic reaction stop taking cialis and get medical help right away. why pause the moment? ask your doctor about cialis for daily use. for a free 30-tablet trial go to cialis.com

house democrats unveiling

$3.7 trillion budget proposal. representative chris van hollen joins us now with the details. good morning. >> good morning. good to be with you. >> let me just see how that -- senator van hollen. wow. wow. how did that sound? >> hey, hey, with the help of your listeners maybe we'll get there. >> wow. that has a nice ring to it, congressman. i know why you're here. and i've read your release. you're going to contrast the democratic budget with the republican budget. both sides are going to say just how ridiculous the other side's budget proposal is. i mean you've even used the term enron. but our viewers at home they're going to realize your budget right now that you're going to talk about has no chance of being adopted during house debate this week but you're going to draw contrast between

what the republicans want to do. the republicans are going to point to your budget and say it breaks the bank and it does this. and they're going to say all the things they're not going to be able to do. and the people are at home are just going to be like why am i listening to this. why are we going through this kabuki dance. >> well there are a couple of things, joe. first of all, i think you're right that the republican budget that will pass the house today will not at the end of the day become law in the sense that it won't be translated into policy because this president won't sign it. and you're absolutely right that the democratic budget that we've put forward today is unlikely to pass the house. but i do think it's really important for people to focus on the priorities and values that are put forth in these budgets. because they do present a really contrasting vision of how we move the country forward. and the hope is at the end of the day there may be some

strands of these budgets where you can come together. but right out of the gate you're right. look, if you look at the republican budget we do believe it makes life a lot harder for working americans. it actually gets rid of some of the tax deductions for a higher education, for the child tax credit. the democratic budget actually provides more tax relief for working families. it extends and expands the child independent care tax credit. dual income tax credit for working couples. so there are major differences. and i think the debate for the country is worthwhile. because what these budgets say is this is what the parties will do if they had the party to do it. probably the best examples of the different approaches. >> here's my idea. and there's priorities on both sides. i'm telling you there's things that you could do together. you could get the republicans to

do the earned income tax credit. and i understand that you guys are about redistributing and maybe through taxes or whatever to help the middle class. why not do pro growth stuff. we had 2% for six years running. why not adopt a little vote. do some corporate tax reform? do some pro-growth stuff with the earned income tax credit. you know, if you don't do it in the house, they don't do anything in the senate congressman. i don't know why you want to go there. they never get anything done there. >> actually joe, our budget is a pro-growth budget. we have a different view of how you grow the economy. >> i know. >> well look. we tried the trickle down theory. >> come on. >> we did. we tried to cut the tax rate -- joe. joe. >> you got to come back. you got to come back before you're a big shot. >> you don't really believe that trickle down works.

>> i do. you got to grow the whole pie. what else do we got for prosperity? we got to go. we'll be right back. thank you, congressman. never before has this kind of passion this kind of innovation, engineering, design and performance... been available... for this kind of price. the 2015 cla from mercedes-benz. see your authorized dealer for exceptional offers through mercedes-benz financial services. ♪ at mfs, we believe in the power of active management. every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. which leads to better decisions for our clients. it's a uniquely collaborative approach you won't find anywhere else. put our global active management expertise to work for you. mfs. there is no expertise without collaboration.

live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc. this is first in business worldwide. i'm becky quick with joe kernen. andrew is off today. we are less than 90 minutes from the opening bell on wall street. futures have been indicated higher. you can see right now the futures are up higher about 41 points. and the nasdaq up by 11. if you check out what's happening in europe at this hour, we've seen some advances there as well although off the highs of the day. the cac in france up by about .3%. germany, the dax up by .2%. oil has been all over the place this morning. it's bouncing back. giving back some of the gains but it reversed some of the losses earlier. wti up 14 cents. breaking news out of europe

if you haven't heard yet, a passenger plane crashed in the french alps. 148 people feared dead. nbc's bill neeley now joins us from london with the latest. good morning, bill. >> good morning to you. yes, the french president francois hollande has confirmed there are no survivors expected on that a-320 airbus run by germanwings. it was 42 minutes into a flight from barcelona to dusseldorf in germany when all contact was lost at 6,800 feet. that is an area of the french alps and debris has been spotted in that area. the plane is believed to be in a crevasse in the mountainside. inaccessible from roads. so even if there were survivors, it would be very very difficult for search and rescue teams to access that plane. however, in an area like that it is quite possible that within

the next few days the flight recorders will be recovered. because at the moment there is no real clue as to why the plane crashed. the weather was perfectly normal light winds, light cloud but no thunderstorms, no bad weather reported at all. the pilot did send out a distress signal and the plane then went down descended from 38,000 feet. and descended at a rate of about 3,000 to 4,000 feet a minute. now, that sounds quite dramatic but it is perfectly normal for an airport approach. so again, nothing catastrophic. no sense that the plane was plummeting or that it had stalled and was coming out of the sky at a great rate. so at the moment obviously the cause is not known. airbus, the makers of the a-320 which is a workhorse plane, about 3,000 of them are in service every day. those employees of airbus are on

their way from teluze where the company is headquartered in france to the believed crash site. police helicopters are over the site at the moment and the french government is stressing that no survivors from that plane are expected to be found. >> okay. bill, thank you very much again. bill neeley. among our other top stories today, february's consumer price index is set to hit the tape at 8:30 eastern time. it's expected to rise by .2%. st. louis fed prt jim bullard speaking in europe today. he is arguing that 0% interest rates are no longer appropriate in the united states. he suggests a rate hike in the summer will still leave policy accommodated. and another possible hack attack this morning. twitch unit with attacks to user accounts. the markets will be getting

more housing data at 10:00 a.m. eastern time. watch for february's new home report. dom chu is looking at new home builders and how they've been performing as we head into the real estate season. >> good morning, becky. it's a seasonably strong time for some of these home builders only because people get optimistic during the spring selling season. they're going to watch closely to see if those numbers at 10:00 a.m. eastern come out in line with expectations for new home sales. if you look at real estate numbers, there are two epfs that track the market. one is the dow jones real estate yretf. the other is the spdr. that etf includes not just home builders but other home improvement companies like home depot, anything home related. if you look at the overall plays you can make a housing analyst

at rbc capital markets, he says you should look for a stronger selling season. especially the momentum to continue for the housing stocks. he does say kb home he's more on the sidelines on only because there are some profit margin clarity things he wants to go through. he wants to see more clarity from kb homes. but lennar and br horton. also looking at names like masco. delta faucets part of that family. mohawk flooring. these are some of the other ancillary ways to play the housing market. he does say stick we the residential side. those three have more residential exposure. armstrong makes floors these have more commercial exposure. he says maybe stay a little bit away from these and stick to the residential side. but still those numbers are going to show a lot about wlorpt

we can see that home building strength. they've been a real source of strength for the past year continue into the next few months as we approach summer. back over to you. >> thank you. let's talk more now about house hunting and whether or not buyers will come out now that the spring selling season is here. joining us with his predictions is stan humphries. it's great to see you. >> good morning. good to be here. >> how are things shaping up? how should we feel about the houses sector? >> i'm cautiously optimistic about housing in 2015. we're seeing homeowner aspirations are definitely higher. people who want to buy homes, we're seeing higher attitudal preferences than last year. they want to buy homes up from about 4 million who said they wanted to buy last year. we're seeing more demand on that side. now, a lot of that 5 million demand will be -- not all of those people will be able to buy homes in 2015. their realities will be

frustrated when they go to the market and find credit conditions and income scenarios that may not allow them to get mortgages mortgages. they also think millennials, we'll see more of them this year. >> let's start start with the aspirational. how closely correlated is that to rising home sales? >> it is actually -- so some of that is going to be frustrated when it comes to the market place. there is a good prediction we will see more demand this year. that is being driven by the fact we're seeing higher rates. we're starting to see demand there. again as i said a lot of those frustrations -- a lot of those aspirations get frustrated in the marketplace because the incomes among first had time home buyers is not growing as fast as we would like. >> what about if the fed raises interest rates, you could look at mortgage rates going up quickly. maybe not quickly. the fed has been persistent in it will be patient in how it raises rates.

but what's the tipping point? 25 basis points 50 basis points, a hundred basis points? at what point does that start to make buyers more reluctant. >> and generally interest rates shouldn't be rising unless we're seeing a rise in income growth. if the feds are going to raise interest rates, presumably it's on the back of a stronger economy and more income growth. normally those two would wash out a bit with an edge toward more income growth than higher rates. and frankly in a lot of markets, it's probably going to be healthy. i think in a lot of markets home buyers right now are looking at home prices through this distorted lens of a low rate. if you look at the bay area those places -- those are two markets where you're seeing affordability worse right now than historically even with these low rates. i think it's important for us to get back to a bit more of a normal rate regime where homeowners are looking at a true price of the housing stock

because they're looking at it through 3.5% mortgage rates. >> does it spur people when they see the fed raises rates like my gosh i have to lock in. >> you certainly do almost every time you see a large jump in interest rates. you see an uptick in activity. people think the train is leaving the station. the reality is i think that's going to be much more needed this time. we just did this is a year and a half ago. went from 3.33 to 4.4. so we've already squeezed that orange once. i think the juice this round will be less. >> it's like banks are -- that's like -- for a bank giving out a 30-year mortgage is like investing money into a 2% bond -- >> for 30 years. and by the way -- >> they don't want to do it. >> no. and you as the holder of the loan can pay it off at any point. they can't call it. >> they have not -- >> consumers have all the upside and the banks have the downside.

>> as a result a lot of banks, you can just tell. they drag their feet. they're really not interested in doing 30-year mortgages right now. >> we have seen the positive developments. of course now there's ubiquitous products. the real problem of course is getting the people who have sufficient incomes to qualify for that. >> but that's part of it too, though, the way they're able to say no i'm not giving you the money is by tightening up on their credit clause. i'm just saying as rates go up maybe banks won't be so tight fisted and they'll say you know what? maybe i'm more willing to start taking a chance on -- if i can get 4% for 30 years. >> that's true. i think you're seeing that in terms of mortgage qualifications overall getting looser because banks have to get business. and as the refi market goes away. >> a lot more customers would have liked to have gotten mortgages if they could. there's two sides of those.

i don't think the banks have been very nice. >> well i think -- but generally if you think about the size of the credit box, the credit box seems okay now. the problem is that it's difficult to lend to the lower half of that credit box. because of the income growth. and because of people's ability to taper down payments. >> it's in the eye of the beholder what the lower half is. ten years ago the lower half would have been -- that's how we were trying to get 70% homeownership. now the pendulum has swung too far the other way. >> that is true. if you look at mortgage access we recently put out a mortgage credit access index where we were looking at what the trends look like. we found we're 2/3 of the way back to what looks like a normal credit access back in the early 2000s. now, we're better than we were in 2010 which was the worst peer period for credit access. we're still really far off to the 2005 levels which we had the easiest access. we certainly don't want to get back to those levels but it

would be better at the 2000 level. >> we're another 64.8% homeownership versus 69.2%. so what's normal? >> normal is about where we are. basically we hit 63% in the 1960s and we have been balancing since then except for a brief period in the sun when we thought we could goose it and get up to 70% which turned out to be a mirage that was not sustainable. >> stan thanks for coming in. >> ya. thanks. coming up the women of silicon valley. julia boorstin reports on gender diversity at some of the nation's biggest tech firms. and the numbers may shock you. that story when we return.

[ male announcer ] your love for trading never stops. so open an account with schwab. and when a market move affects, say a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time comes to decide whether to scale in or scale out... you can make your move wherever you are. and start working on your next big idea. ♪ ♪ hey, girl. is it crazy that your soccer trophy is talking to you right now? it kinda is. it's as crazy as you not rolling over your old 401k. cue the horns... just harness the confidence it took you to win me and call td ameritrade's rollover consultants. they'll help

with the hassle by guiding you through the whole process step by step. and they'll even call your old provider. it's easy. even she could do it. whatever, janet. for all the confidence you need td ameritrade. you got this. ♪ ♪ i'm almost done. [ male announcer ] now you can pay your bill... ♪ ♪ ...manage your appointments... [ dog barks ] ...and check your connection status... ♪ ♪ ...anytime, anywhere. ♪ ♪ [ dog growls ] ♪ ♪ oh. so you're protesting? ♪ ♪ okay. [ male announcer ] introducing xfinity my account. available on

any device. welcome back to "squawk box." the futures right now have been pretty quiet all morning long. back to up about 34 points indicated on the dow. up 3.3 on the s&p. the nasdaq up just under 11. mcmoran the shares are under

pressure because the company is cutting its dividend to 5 cents from 31 cents. freeport blaming the impact of lower commodity prices on its business. i would dare say this probably is not going to be the last company that we see do that. i'm just quickly hitting this up. yeah. that's a quarterly dividend that it's cutting. didn't really make that clear. it was $1.25 is the dividend. and the current yield is 6.4%. 6.5%. because the stock has come down to $19 and the high was 40. >> dropped it down to one and change yield? >> right. but you need that information. it's not 31 cents on $19. it's $1.25 on $19. also estee lauder upgraded

to outperform at wells fargo. the analyst is pointing to accelerating growth in united states and growth in emerging markets. and kimberly-clark upgraded at wells fargo. the stock's valuation range is between $117 and $120. whiting petroleum announcing plans to sell 35 million shares of common stock. they want to reduce debt from its december buyout of rival kodiak oil and gas. there had been rumors that whiting was considering a sale. and chesapeake cutting its cap-x. we told you earlier the other story about chesapeake carl icahn is increasing by 7 million shares. now has 73 million shares. coming up, the february consumer price index and reaction to the data.

investors watching in today's trading session. when we return though paying homage to "star wars." madam tussauds getting ready -- how do you make a chewbacca out of wax? we have a video there. after the break. the e-class has 11 intelligent driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2015 e-class. see your authorized dealer for exceptional offers through mercedes-benz financial services. being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform,

the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. can data help cure a disease? the right treatment for you is out there. the problem is some of it's in this lab. some of it is in her head. some of it's in this new journal. and the rest of it is in your personal medical history. ibm watson can not only read this data, but understand it. it's trained by doctors. and it's always learning. it can help find hidden correlations and help your doctor recommend treatment options for you. there's a new way to work and it's made with ibm.

welcome back everyone. final arguments are set today for the discrimination lawsuit against kleiner perkins. julia boorstin is in san francisco this morning. she has the ripple effects of this high-profile case. julia? >> thanks so much becky. that's right. this case has put gender discrimination in the spotlight and it seems like the flood gates have opened. both facebook and twitter have been hit with discrimination lawsuits in the past week. a former twitter engineer filed a proposed class action lawsuit against twitter. alleging the company uses a secretive promotion and hiring practice that favors men. twitter responding saying quote, it is deeply committed to a diverse and supportive workplace and we believe the facts will show that ms. huang was treated fairly. also suing facebook on behalf of

a former employee claiming she faces discrimination harassment, and retaliation. facebook saying they're working hard in diversity and have substantive disagreements on the facts and we have record that shows she was treated fairly. while sheryl sandberg is promoting her lean in movement last june facebook reported that 69% of its overall global workforce is male. that's in line with google apple, and twitter all presenting 70% male workforce. yahoo! is 62% male. there are fewer female executives. they comprise just 23% of facebook senior ranks though that's better than the average here in silicon valley where women comprise just 11% of the executives at silicon valley's top companies. that's five percentage points less than the average at the s&p 500 according to a study by law

firm fenwick & west. this is a key for entrepreneurs and investors. so industry watchers say improving the numbers at the big companies is key to improving the overall gender diversity here in silicon valley. guys? >> okay julia. thank you. we appreciate it. it's dark early out there. and check it out. a galaxy far, far away got closer. wax museum madame tussauds in london will open a multi-million-dollar interactive 'star wars" exhibit this may. it will feature replicas from the original and prequel trilogies including darth vader and yoda. the 11 walk-in sets reproduced will include the flight deck of the millennium falcon joba the

hut's room. and the iconic scene in which darth vader reveals he is in fact, luke sky walker's father. madam tussauds. no one told me that in i had ear. >> i'm guessing. in other hollywood news "fast and furious 7" is going to hit theaters next friday. it is projected to have a $115 million opening. the movie's star social media power is astounding. of the top ten facebook actors this year, furious in terms of their social media universe. kwt "furious 7" has most of them. those are likings on their facebook page. but they also have facebook and twitter and it's 800 million or

so. this is pre-sold. it'll be interesting to see if it does 115, 120, 110. whatever it is it's either going to be a lot or a little less than a lot or even more than a lot. >> right. >> and it looks pretty cool. some of that stuff -- some of the stunting i don't think they really did live. i don't think they're -- you know guys jumping off a plane and catching on another plane. the things i don't really think can happen. >> i like the cars going out here where they have parachutes on the back. >> see, i'm not really sure. but it's cool. >> don't try this at home. >> yeah. it is cool. and vin diesel was in the post talking about it gets emotional talking about paul walker. when we come back this morning, we'll get a read on inflation. february cpi data will be out. plus the latest on the plane crash in france this morning. all feared dead. we have details ahead. and then the euro's drop. giving investors a place to find

deals. on the city's most famous street. it's the company's second deal in paris. the ceo of thor will join us to talk bargain hunting in europe. before we head to break, look at the equity futures. mfs, we believe in the power of active management. every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. which leads to better decisions for our clients. it's a uniquely collaborative approach you won't find anywhere else. put our global active management expertise to work for you. mfs. there is no expertise without collaboration.

♪ help an oil company overcome minus 47 degree temps, 5 foot ice, and 16 foot waves, to safely keep crude oil flowing 365 days a year. when emerson takes up the challenge it's never been done before simply becomes consider it solved. emerson.

we are just a few seconds away from the february cpi data. we're looking for a growth of 0.2% which if that happens it's the first time we'll see any inflation since all the way back to october. ahead of that why don't we get a check of the markets ahead of it. the dow futures are up by about 30 points above fair value. s&p futures indicated up about 3 points and the nasdaq indicated up by about 11 points. we've also been keeping an eye on oil prices which have been bouncing all over the place this morning. right now up by about 1%. that's a gain of 51 cents. rick santelli is standing by at the cme in chicago. rick, take it away. >> as expected up .2% on headline cpi. strip out the food and energy still up .2%. no revisions to last month's

large .7% drop of course reflecting energy. if we look at some of the year over year data what we find is on food ae energy up 1.7% and that's pretty much as we're expecting. and a tenth hotter than our last look. when it comes to what's going on with interest rates in the marketplace, we continue to try to handicap the timeline of the u.s. fed. the operational impact of quantitative easing in europe. we see the euro for another session. you know, off and on the last seven session have been upside in the euro versus the dollar and any other currencies. and that seems to be synonymous many ways with our equity market which has a distaste of course for the stronger dollar and crates creates a very interesting set of dynamics for europe. some information out of europe was perceived to be better.

then again, some of these surveys like business confidence like some of the institute for management numbers that we see by some of the people involved in the manufacturing process, we see lots of jumps when we're kind of in qe mode. especially on inventory bills. we've experienced that several times over the years 2011 2012. it's going to be fascinating to watch how some of this data in europe pans out over the long haul. we still have new home sales yet to come. and of course interest rates, well, we said last year at 2.17%. now we're at 1$1.90. >> what did you think about the weaker manufacturing numbers that came out of china? >> you know i think personally i think that china is in a lower glide path than i think you're going to see all of those numbers continue in that direction. and i don't think this is short-term. i think we're looking at kind of the new normal in china for

awhile. as the rapid pace of growth several years back is going to moderate in the global dynamics moderate with them. >> that's an argument for lower crude prices. we had a guest earlier today taking the counter side of that. thinking maybe growth is not going to be great if the united states. maybe it's not going to be great in china. excuse me. maybe growth will be stronger than expected in china and that as a result will actually push wti and brent prices higher. >> well, i think it sounds like a great theory, but if you take a macro view the big commodity view was a twofold attack. it was china of course trying to corner to any base metal commodity. you add that all the easy money and looking at commodities as a sector that's uncorrelated of course to major portfolios and the rest is history. >> okay. rick, thank you. >> thank you. >> steve leisman is here and has more on the numbers as well.

what'd you think of cpi? >> first increase in gasoline prices since june and the first increase in the cpi the headline cpi since october. i think the fed is going to welcome this. this is all over the place when you look at the details. you have, for example, prescription drugs are running at a 5.2% year over year rate. contrast that with gasoline or with transportation down at a 10% annual rate. services i think there's a place where the fed may constitute 2.4%. the question i think we had going in was how much was happening in the headline spills into the core. and they like to make based in part because it's much more stable. and you see that kind of stability. so if you had to guess and make a call on this, you say this was a notch in the second criteria for the fed which is confidence that we're moving back towards 2%. and i think that this is a sense that you went up year over year on the core from 1.6% to 1.7%.

>> the first thing you pointed to was higher prices. they've been coming down since then. that was one off for the month. since that point, prices have been coming down. if you look at this as proof that inflation is starting to get back to more normalized levels, it might get back. >> what we're trying to do is look through the volatility. when you look through that you see that it's not spilling into services, for example, and what's happening with import prices are not spilling into u.s. prices in a big way. one interesting factor is airline fares actually went up 0.2%. they are down 3% year over year while a look at aviation fuel prices are down 48%. interesting question about the. >> we talked about that here. >> you did some research on it. >> he thinks that when oil

prices come down that immediately they should be cutting fares by the same price of -- they should be rebating to customers and to consumers the same amount. and we had doug parker on the american airlines ceo. he said you know there were plenty of years where there was no return on invested capital whatsoever. and so now it's like windfall profits tax. when they come down they're on their own. it's the same thing. why shouldn't airlines be allowed to reinvest so margins go to six to ten. so they reinvest. next time they put some money away -- >> no, no. i'm with you, joe. >> it's a ridiculous notion. >> no. it's not. oligopoly. he's very animated about this. >> there are monopolies and perfect competition. everything in between would

work. there's a big barrier to entry and there's a lot of money to do it and it's hard to come in and compete, there are going to be certain routes where only one or two airlines -- >> let me ask you a single question. you fly a lot. i fly maybe more than you do. >> it's the best deal in town compared to 30 years ago. >> really? >> it used to be $800 to fly to california in the '70s. >> but how competitive does it feel to you? that's the issue i get. >> did it feel competitive when all the legacy carriers had to go bankrupt or merge? that was competitive. what did doug say? we're only as good as our dumbest competitor. it's a red herring. >> in russia service a non-competitive market. it just feels like in the time i've been back in the united states which is 15 years -- >> who controls the landing slots? how does that -- >> that is from the government. >> that's from the government. thank you. okay so if it's not perfect competition, then talk to the

government about it. >> i would like to. i would like to includes the technology. -- increase the technology. i'm with you. >> no you're not. sorkin is so wrong on this and so many other things. >> let me finish the sentence. such that when there is a decline in input costs, there is a decline in their cost of delivery that there is competition that then allows consumers to get some of that reduction in cost. how much comp tisetition is there? >> how much do they charge per seat. >> there is some competition. >> look. >> you don't think any of it should be passed on? >> no. none of it. a b salute absolutely not. if someone can come in and do it cheaper -- the reason the airlines are in better shape now is they cut out more flights, there's more capacity. they're in better financial shape. i'm glad. all the legacy carriers are

bankrupt or merged already. you've got come pet tors like southwest, but jetblue and others can come in. >> to an extent. >> they do. >> what andrew says in his piece -- >> up next thanks to a slumping euro we -- i'm just glad he's not -- anyway. later metallica is banging their heads over debt. one of the most successful metal bands of all time reportedly have been money issues. we'll explain in just a bit. "squawk box" will be right back. i have a wandering eye. i mean, come on. national gives me the control to choose any car in the aisle i want. i could choose you... or i could choose her if i like her more. and i do. oh, the silent treatment. real mature. so you wanna get out of here? go national. go like a pro.

the future of the market is never clear. but at t. rowe price we can help guide your retirement savings. our experience is one reason 100% of our retirement funds beat their 10-year lipper averages. so wherever your long-term goals take you we can help you feel confident. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. call us or your advisor. t. rowe price. invest with confidence. opportunities aren't always obvious.

sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

we do have some breaking news out of europe this morning. a passenger plane crashing in the french alps 148 people feared dead. wilford frost joins us from london with the latest. >> thank you very much. it's a germanwings flight that took off from barcelona at 4:55 a.m. eastern time. it was en route to dusseldorf in germany but crashed in the southeast of france at 6:20 a.m. eastern time. it's in the area of the alps near the border of italy reportedly to some two kilometers of altitude. that's over 6,000 feet. there were 150 passengers on board confirmed by the airline germanwings which is a subsidiary of lufthansa. 150 lives in total. president hollande of france said no survivors are expected.

thus far lufthansa has not confirmed that themselves. they have said if fears are confirmed, it's a dark day for lufthansa. they do say they hope to find survivors. one of the reasons we don't know for sure yet is it has crashed at a high altitude in the alps. helicopters have spotted debris from the crash but nobody has reached it on the ground yet. we know it's an airbus a-320 aircraft. airbus is aware of the situation and are working to assess it. according to air fleet.com, it's a 24-year-old aircraft which has been with lufthansa since 1991. since the aircraft went into operation. the germanwings press conference will be at 10:00 a.m. eastern time where we expect to hear more. that will come from the headquarters of lufthansa, the parent company of germanwings. >> thank you very much.

we will keep you up to date as we hear more. we're looking at the futures still indicated up higher right now. s&p futures up to close to 2. the nasdaq by about 7.5. keep an eye on ross stores today. announcing a two for one stock split. the falling euro making it cheaper for u.s. companies to invest in real estate. hopefully they will be rescinding some of those ill-gotten gains to consumers immediately. u.s. based property thor equities are acquiring its second building famous called le queen. the ceo and founder of thor equities is here. that's not the only thing you've done recently over there, is it? >> no. we've been quite busy active

particularly in the eurozone markets. overall from a bigger perspective you've got to be a macro player. being real estate or anything else. >> so do you need to have e the view that many of our guests have, that europe is right on the cusp of a rebound? >> i don't know that it rebounds as quickly as people think that it's going to rebound. but i certainly think that the currency wars and they're winning right now that currency war by devaluing the european and the euro in particular. currency is going to benefit proportionately from that zone. i think as a result of that whether it be export businesses tourism-related businesses retail hospitality, et cetera are going to boom. i think the hotels across europe for example this summer i expect then project the numbers that are going to be

staggering in terms of the increase and visitors there as opposed to countries that are losing the currency war. >> not to mention there's a huge discount on the property if you're taking american dollars. >> sure. you get a double benefit. even to buy a home in europe today. if you think about it. the home costs you $1.5 million a year ago, today it will cost you about $1 million today. so the value there is tremendous. and i think that europe is one of the flight to safety markets that has also gotten the discount. what i mean by that is there's so much political risk all around the world today whether you look at the middle east shiite sunni wars going on there, civil unrest in certain countries, political mismanagement in markets like brazil. and people are looking for a place to put that capital. they look at the u.s. and europe more than ever as the safe haven. as i call it yesterday's gold

is like today's real estate. >> do you leave money over there? >> i do, but i don't over-leave capital there because i'm still an american. i'm spending u.s. dollars. so there's always that extra risk. to a great degree, i say yes. more particularly of late. >> do you have a tax problem repatriating? >> no. >> because we have the united tech new ceo on. there are people who are happy to leave large sums over there to do foreign acquisitions. they won't even try to bring it back. >> i would say folks like ourselves were a little more afraid of that with euro done so much. we look at it also as an investment play. we'd had not as much downside risk obviously when you had 1.40 to the dollar in ermterms of the euro exchange currency. overall i don't expect great

boom times in europe but i believe they're winning the currency war. >> and you like turkey and greece too, huh? >> we're folks that will go to where we view opportunities. right now greece is a market that's been beat up. it's sort of the same opportunity we saw in ireland before and spain before. and we're always looking for where that next opportunity is where people are undervaluing the market. and greece obviously is probably one of the most beat up places in the world. still a safer market. >> nice if you could buy in drachma, even cheaper. 50% less than where it is. >> maybe you will be buying in drachmas. and the same thing in regard to turkey. turkey's still a great country with tremendous economic potential. really is the gateway to the middle east. the problem there and why we see opportunity with so much international capital is run there. they've been afraid of the politics there. i know what it was like. i was there myself in the middle of -- i got tear gassed in the

middle of the rallies to bring down the government and the presidency. looks like he's going to hold onto his government. and i hope he threads the needle and while he caters to the islamic needs of the country also caters to the stability that's needed to keep turkey's economic growth happening and continuing going forward. >> right. all right. thank you. good to see you. >> pleasure. all right. when we return jim cramer from the new york stock exchange. plus metallica seeing red. a couple of missteps could have the band touring longer than they ever imagined. details up next. say you're a finance guy. a farmer. a researcher. you used to depend on experience. the internet. your gut. today you can use ibm watson analytics. it can make sense of all kinds of data. uncover hidden correlations and new opportunities.

and give recommendations with more confidence on who will buy. what to make. where to plant. which helps you make smarter decisions. there's a new way to work and it's made with ibm. being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier.

it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

♪ ♪ i'm almost done. [ male announcer ] now you can pay your bill... ♪ ♪ ...manage your appointments... [ dog barks ] ...and check your connection status... ♪ ♪ ...anytime, anywhere. ♪ ♪ [ dog growls ] ♪ ♪ oh. so you're protesting? ♪ ♪ okay. [ male announcer ] introducing xfinity my account. available on any device. a heavy metal juggernaut reportedly being dogged by creeping debt in a new interview with literary website the weaklings, metallica biographers reveals the band's finances are in the red, losing as much as $32 million since 2010. two major risks that turned out to be disastrous 2013 3-d film "through the never" and two stagings of the owe ryan

festival outside of detroit. metallica working on the long-awaited follow-up to 2008's "death magnetic." let's get down to the new york stock exchange to our head-banging stock figure and stock expert jim cramer. metallica big in your house, jim, or -- >> no no. no, not that you know maybe like more like a motezart kind of thing. worlds collide. >> sort of similar. what's on the radar for you today on "squawk on the street"? i saw a trillion dollar company apple might become. >> right. i think apple's doing incredibly well. i think freeport is interesting that they cut their dividend and it it shows you exactly how weak china is because i regard copper as china. copper's fight yesterday, maybe it was false giving the number on the pmi are weak i'm loved andrew's article i think it's

clear the airlines love the oligopoly, it's fantastic. but march numbers may come down. i don't know how strong march was for the airlines. >> perfect competition and then there's monthopolyies and everything in between. there's a lot of oligopolies because that's the way things are, right. >> who controls the oligopoly? the government controls the slot. won't you like to see an airline industry that didn't go bankrupt every five years? >> absolutely. you're finally making money in these stocks and what's owing gone they have become businesses. they've become businesses because they're like the rails. the rails stopped competing and the rails are great investments. wouldn't shouldn't they have a right to make money? what i'm hoping is not true is march is weak. i'm homing -- these stocks are cheap if they canontinue to have momentum. >> in '70s a ticket to l.a. was

$600 or $700 and ilt's still $700. people say if a pill costs three cents to make how can you charge $100 for a cancer bill? >> because it costs $10 billion to develop. >> a barrier to entry, also for airlines, a lot of capital investment. for years for 20 year return on investment capital was zero. zero. >> it's healthy. we want a healthy airline business. it's good. >> maybe the government should mandate that every public company in the united states that uses any type of energy input from oil should reduce their prices to consumers by the amount that oil's dropped. just do it -- >> it's like the greyhound bus company. how are they doing? how is trailways? >> it's a -- i don't know. >> let industries make money. there's nothing wrong with making money. >> horrible. the shareholders might not have to exit the airlines. >> good for boeing.

>> but that's bad for us. >> "squawk box" will be back in a moment.

can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver?

♪ at mfs, we believe in the power of active management. every day, our teams collaborate around the world to actively uncover, discuss and debate investment opportunities. which leads to better decisions for our clients. it's a uniquely collaborative approach you won't find anywhere else. put our global active management expertise to work for you. mfs. there is no expertise without collaboration. welcome back everybody. we were showing you headlines of breaking news. morgan stanley announcing the

cfo ruth porat is leaving the firm going back to silicon valley for a role there. investment banker jonathan pruzan will be take over. shares of freeport-mcmoran under pressure after the company cuts its quarterly dividend to five cents from 31 cents. freeport blaming impact of lower commodity price but raises the question if other companies will do the same. managing direct of managing cool and steel. what do you think? the first of many given the volatility in commodities? >> i peck so. it's not surprising with freeport. this saves them $1 billion. at today's copper prices talking about losing a couple of billion dollars free cash throw this year based where prices are. >> a steep decline in oil prices but we have not seen oil companies slicing their dividends. what they've been doing is slowing down buybacks and/or

cutting cap x. >> freeport did a deal a couple years ago and have $20 billion of net debt. with the copper price it was free cash flow to run the company. they just don't have the cash flow to support the dividend. >> a 6% yield to 1% yield. would you buy the stock. >> i think this is close to the bottom. if copper prices stay where it is, we're close to the bottom on freeport. >> thanks for coming over today. that does for us today. we have enjoyed seeing you this week. we'll make sure wu seee'll see you tomorrow. >> we'll be back tomorrow. full force for two days. >> two days. >> and it will be a good couple of days. join us. right us it is time for "squawk on the street." good morning, welcome to

"squawk on the street." i'm david faber along with jim cramer. we are live from the new york stock exchange. carl has the day off. a look at futures. we are set up for a slightly higher open after a rare down day, at least rare in recent sessions, for the dow and the nasdaq. crude oil always a key, at least these days. where has it been hovering around? $48 level. up rather nicely on the day. and the ten-year note yield, of course i was away whe