locked out of the cockpit and pounding increasingly harder on the door before the aircraft went down. squawk box begins right now. >> good morning, everybody and welcome to squawk box on cnbc. a lot of news on our plate as we bring you up to speed. let's start by checking on the futures. you're looking at the futures right now. the dow futures down by 132 points below fair value. nasdaq down by 46 points and s&p down by 15 points. this comes with the dow down close to 300 points yesterday. that's a decline of 1.6% pay attention to the biotech sector

today. sparking worries in the broader markets. some questions whether this is an early warning sign of a broader sell off. the nasdaq is coming off it's biggest one day losses in nearly a year. the index is on pace for the worst week since october. in the meantime the dow and s&p are down 2% in the last three days. >> as we talk about a sell off let's talk about the hideous elixir. a witch's brew. or a famous miles davis album. what was that 300 point advance we saw last week after yelen took out patience? how much fundamentals were underneath that move higher? how real was that move higher and what inspired it? what about the recent economic numbers. people are still talking about

3% year in gdp but they seem committed to increased rates so we're in an environment where the fed is for all intents and purposes tightening and then i have been making the point you put apple in the dow and you're asking for it. you're trying to top the market out. let's look at a six month chart of apple now. number one, you get it up near $800 billion. people start talking about a trillion dollars and we start talking about the law of large numbers. just this week analysts put $180 price target on it and then you put it in the dow. well the stock was down about 3 points yesterday. it's at about 715 -- 718 down from 780 billion. so you do another three or four points on apple we're below 700 billion and who knows what happens from there on out. what else happened yesterday? we'll look at an s&p chart.

that's still above but if you take out the losses today it would be down for the year and was there one other sector that was the poster child -- well i wouldn't say apple is growth but bio tech has been really really hot -- do you remember our interview on monday or tuesday where i said it was monday. >> monday. >> you look at your revenue, it's hard to understand valuations in bio tech but we explained it. that given where we are in terms of science and molecular biology we're right on the cusp and they need all of this basic science that the bio techs are doing so there's a reason to reward these companies with a multiple to revenues and not even a multiple to earnings because there's so many drugs in the pipeline. we justified what's a market multiple bio tech. what's the market multiple for

bio tech right now? 30 or 40? >> i don't know. >> there are plenty of big name bio tech stocks not selling at a multiple like apple. >> the big pharmaceutical companies aren't developing like they used to be. >> overall? >> that sounds too high to me. >> it does but let's say it's a third of that. let's say it's off by 100 or 200%, still all of these things we took for granlted is this nowted is this now, with with the fed tightening where they move away from -- >> 0% interest rates. >> is this where we get the 10% and the other thing, he has a bounce in his step the -- maybe

this will be right three times but the other thing that scares me is if it does become clear that the economy is slowing and the fed does worry about a tantrum and if they decide not to raise then i start thinking they're stuck again. they're stuck and they're never going to be able to raise. >> i think they read the papers and they shouldn't. >> if we are talking about a downturn in the economy we'll be getting higher wages. >> 5.5%. >> capital expenditure. >> go to one. don't stay at 0. they don't have the nerve though. they will lose the resolve and stay at 0. >> they are making the argument that they aren't tightening. they are tightening. they're going back toward normal maybe. taking baby steps back toward

normal. >> but the they're piling on saying how do you raise rates right now? it's a free lunch. keep it going. keep the party going but you need the underpinnings. but 5.5% we should be at 1 all right. >> but we don't know if the economy is there. look at the durable goods numbers yesterday. look at inflation. we're still closer to 0 than 2%. >> that's the problem with the dual mandate. yesterday we started down how much? minor? >> you're feeling so negative. >> i'm not feeling negative. it's just catharditic. sometimes you need to flush it andrew. in this case flush it down. >> we haven't had it in how long? >> 10%. >> ever since the geniuses at s&p decided to add apple to the

dow so we could enjoy the ride down to more reasonable levels. >> the last time we claimed it was 10% it was not. 9.9%. >> let's check on the broader markets this morning. we showed you the red arrows here in the united states. the early trading in europe this morning you'll see at least at this point it looks like yeah some red arrows there as well. europe is not only reacting to our futures this morning but also what happened yesterday. the cac down by 1.5%. dax down by 1.6%. ftse down by 1.2%. in asia we saw a strong reaction with the nikkei down by 1.4%. shanghai was down by 1.6%. watching the bond markets in the united states you'll see the ten year note is yielding 1.9% so the yield slipping back a little bit. dollar this morning is down across the board. this has been the other part of the story. as the dollar has weakened that has been part of what's propping

up oil prices. all of these movements. people trying to figure out if this is a correction from the massive gains in the dollar or a change in direction. you can see the euro is at 11026. dollar-yen at 11524 and gold looks like they're up by about $13. $1,210. back up $1,200 an ounce. >> among them saudi arabia and it's allies launching a military operation in neighboring yemen. targeting the rebel who is have driven yemen's president from its capital. the action sparking worries about the security of middle east oil shipments. also crude rising sharply in early trading. take a look at what's going on. you're seeing wti crude down at $51. michelle what did i call you. >> chief investment correspondent. understandable flip. >> chief international

correspondent correspondent. >> it's not just that. it's over the dollar. >> if you didn't role the futures it would be at 45. >> this is one of the pieces of news that it's driving oil higher overnight. gives me options. that's good. let's role the video. saudi arabia began air strikes in yemen last night. attacking rebels. the saudi kingdom vowed to do whatever it takes to restore the saudi backed government rooted

by iran. the president abandoned the country leading on a poet leaving the southern part of aden. it was announced by the ambassador to the united states last night at the embassy in washington d.c. >> they he have then taken over the armed forces of the yemeni state. they are in control of heavy weapons as well as military bases and ports. the yemeni president, the legitimate president of yemen was able to escape. >> oil is sharply higher. the rebels are backed by iran. this is shia versus sunni and if and when they can reener the world economy they'll have a lot more money from being able to sell oil once again and they'll be able to exert a lot more

influence in the region than they already do. they're involved in iraq syria, lebanon and now yemen and this is a move on a bigger picture to say we're not going to stand for this. >> the other thing is this is happening while we're supporting the saudi and their partners on this side of thing we're also negotiating with iran on the tuesday deadline for what happens with the nuclear ambitions. >> we're on the same side of iran when it comes to syria. >> it's bizarre. >> how do you put all of this together? i can't imagine. >> you highlight that the middle east beginning with the arab spring is falling apart at the scenes or at least the control exerted through colonialism and the past is coming apart and -- >> boarders are collapsing. >> exactly and we have to live with the consequences and watch the unintended consequences of all of these things. >> what's the break down in

yemen? it's a 70-30 split? i reversed that. >> but bottom line think of it like influence, yemen is on their border and they won't tolerate an iranian backed border there period. kind of like how we talk about ukraine. >> it's amazing to watch that on the border right now. >> this is all part of it and part of this seeping into the financial markets. >> i was wondering how much of the sell off might have been driven by this. >> just the general nervousness about everything happening. dow dropped almost 200 points yesterday. sell off continuing this morning in a big way. a lot of different pack tos weighing in. rebalancing to the dollar slide against the euro. let's take a quick look right now. this hour.

we were talking about the fed resolve. he is saying bog things. he is hawkish and this hawkish view is some what tempered by the low inflation they have seen. that gives the fed some breathing room. it could be due to weather and expect a second quarter bounce back. he could see the jobless rate below the 4% range in early 2016 as a reasonable prediction. so even though things seem a little bit -- what they're not eluding to -- they shouldn't. they built this house with no foundation. if it starts collapsing they're going to feel responsible for it. the chief market strategist. what are you seeing here? >> a agree with you. >> the fed, if they built the

house out of you know on a wood foundation they shouldn't worry if it doesn't hold up like they thought, right? they have a rate don't they? >> i agree. it's just an unusual six years until a recovery but the problem is gdp growth is more than 2.5%. it's this lackluster mediocre type growth rate not taking a look back and seeing the policy is not working and not having the guts to raise rates. rates went from 5.25 to zero and they can't raise 25 basis points. >> not only do they listen and watch the markets and i think they're effected by it but we know that because we saw the taper tantrum. they did seem to back off now. do he they also listen to the progressive left which couldn't

be more stayed in their notion. because she's dovish. she is going to hear it. you have to stay at zero. you should go negative maybe. >> it's the look of the economy. try to stimulate by encouraging people to borrow. we reached a point where there's so much borrowing that the cost of money doesn't matter. it's not the impetment to further growth and it's caused a lot of rot in the economy. we have companies in the u.s. able to stay alive because they can sell debt in the market and we're repeating monetary policy of japan. why do we want to emulate it. >> we did shock and awe. they didn't do it. but all monetary policy does is pull forward activity.

it doesn't create growth that wouldn't have happened on its own anyway. we pull forward activity and still can't get out of this. we could if the fed had any guts but they don't. >> the other thing they're going to say is look at the comparable rates around the world and we're way higher already than all the rest. >> what i say to that is there will never be a good time to raise rates off zero. >> but there can be worse times. >> well imagine data has been poor. imagine the economy slows further. and they have no tools to respond. >> that's saying we missed it. we missed our window already. >> there's no question about that. the fed is crewed essentially. >> we knew all along people were predicting they would get less and less bang for their buck with everything they do and sooner or later something is

going to come along where we are have no ammo left. >> that's where we are now. >> you think? there could be a slow down and we have nothing to do? finally all the things we have done stop working and people will say as long as there's no negative consequences we might as well keep doing it but maybe down the road there are negative consequences. >> also qe ended late october and the new york stock exchange composite is back to where it was last july. the s&p with today's opening will be back to middle of november. it's one of those things that qe for example enlarges the bubble and the bubble starts to deflate again. >> you said there was a way to fix it. what is the way to fix it? >> it's the economic environment. it reduces the chance. >> what is that? 5 or 6%? you're not getting back to normal? >> no, it's going to take awhile but the fed needs to start the

process. even is growth is 2.5%. europe is still abnormal. if the fed funds rate is at 1.5% which is the rate of inflation. >> bullard seems to be saying we're going to do it because we have to. do you think when it's all said and done they have the nerve to do it in june? >> if the unemployment rate is 52 they'll have no choice. if it means a recession it means a recession. but i know looking at over the next five to ten years we have to get out of this. >> all right. i think that's all. i think that's a good summary of what we're looking at. it's funny the way all the other things coincide with it too.

>> bio tech stocks last week. classic reversal. >> thank you, sir. >> thank you. >> we'll talk about another story. >> it's not a business story but i know you have been thinking about it. >> it's close. >> because there's intrigue and we have no idea. >> and i'm getting on an airplane. >> are you ready? >> i start thinking about all of this it becomes very personal. i don't know why that happens. we're going to talk about the story of the morning. a shocking report on what might have happened now outside the cockpit of that germanwings plane that went down over the french alps this week. phil joins us with the latest. tell us where things stand because there's a number of reports now that are pretty wild and scary. >> this is the shocking report that came out first from the new york times last night. it's now been essentially confirmed by other reports out of europe that one of the pilots was locked out of the cockpit was the plane was descended down

to 6,000 feet. the pilot was locked out according to an investigator remaining unnamed but who was quoted by the new york times as listening to the voice recorder. he says you can hear the pilot knocking on the door. gently at first but then eventually -- essentially trying to smash down the door and never gets inside. it's unclear who was the copilot and who was locked out. the guy outside is knocking lightly on the door and there is no answer the investigator said and then he hits the door stronger and no answer. there is never an answer. the source goes on to tell the new york times we don't know the reason where one of the guys went out said the official but what is sure is that at the very end of the flight the other pilot is alone and does not open the door. now all of this raises the question, a, what's the protocol when it comes to one pilot leaving a cockpit and then

wanting to reenter. here's how it works with airbus a-320s. all of the doors they have security doors so as one pilot leaves there's supposed to be a crew member that goes in and stands inside with the other pilot. there are key pads on the outside of the cockpit doors that can be accessed with a code to unlock that door. however we should point this out. there's an override switch in the cockpit which if the pilot and the crew member inside the cockpit, if they hit that switch, it will not allow that door to be opened. what is unclear here is a was there somebody else inside the cockpit with the one pilot in there. was protocol violated or did the one pilot leave? essentially leave one pilot

alone inside the cockpit which is against protocol and finally what happened inside the cockpit? there's no details about that kwet but we should point out guys a couple of press conferences coming up. one at 7:30 a.m. eastern this morning. a french prosecutor will be holding a press conference in france to discuss the investigation. i imagine we will get more details about what's on this cockpit voice recording. >> so there's a couple of issues here. the most interesting and tragic is that one of the pilots were purposefully locking out the other pilot. the other issue that some people have surmised that perhaps because the plane dropped fast i don't know how fast 38,000 feet to 6,000 feet in 10 minutes that somehow there was depressurization and perhaps the other pilot passed out or fainted. >> my argument to that was -- if

it was a pressurization event it wouldn't have been just inside the cockpit. it would have been for the entire plane. >> right when a guy leaves too. >> this sounds like i'm knocking on the door and knocking on the door. this does not sound like there's a pressurization event. >> could the other pilot have had a heart attack. >> that's possible but then again it gets back to protocol. protocol is and we believe germanwings is supposed to follow the same protocol. that's when one pilot leaves the cockpit a flight crew member impose inside the cockpit. did that not happen? it's unclear at this point. >> you know what's next that's a look at these two pilots. >> correct. look into their background. >> names, background anything out yet? nothing, zero? >> there's one report out of europe that one of the pilots had 160 hours experience. the other pilot has at least ten years experience but other than that we have no background and they're also going to look into the possibility, guys there's

also the possibility of pilot suicide although this does not fit the usual pattern of pilot suicide. usually it's a nose dive. >> phil nothing out about names or nothing hike that. >> correct. and that's why these press conferences are so critical because i think people are going to start saying we want more information. >> there's the other situation where they were interviewing family members and work associates and everything else about the mental you know state of the -- yeah. >> right. >> obviously this is -- i wonder when we cross reporting and go into conjecture. everybody is conjecturing i guess. >> that's already happening, joe. but what's clear is i think this investigation is pivoting and moving much more toward a criminal investigation as opposed to a typical civil aviation investigation. >> phil, one of our eagle eye viewers has a question for you which is a smart one. we always talk about the voice recorder. in this great age of technology

why is there no video recorder up there. >> great point. a lot of people have asked for this in the past and it all comes down to two things. one, who is going to pay for the bandwidth so that you're feeding out of the plane approximate you're going to do that or two why not just have it in there sort of a go pro approach so if there's an accident you can go back and look at it. >> it's the pilots i imagine. >> it's more the pilots than the airlines have been more resistant resistant. >> thank you for joining us. we'll be sticking here to keep up with you and that story all day. >> i don't even know. there's a lot of ways to kill yourself where you don't kill 150 people. to decide to kill yourself -- that's nuts. that's like murder. i don't know. anyway coming up -- >> you could forget the code to the pilot on the outside and you

don't have the right code. >> and the guy is passed out inside. >> there should be another person in there too. >> this is conjecture at this point. >> it's useless. shares of red hat -- that's not going to stop us though is it? shares of red hat getting a nice bounce this morning. we'll talk to the company's ceo. that's next.

software provider red hat opening with revenue and profit that both beat expectations. jim is the ceo and he joins us first on cnbc. thanks for being here this morning. >> happy to be here. thank you. >> so your numbers were better than expected. what happened that surprised the street and did these gains surprise you even?

>> well there was strength across the board which even surprised us. it's a reflection of the fact that cloud adoption is happening faster than people thought it would happen and we play public and private cloud and we're seeing a move to those environments and that's good for us. >> why do you think that change is happening? what's happening at the corporate level that's making things happen so quickly. >> there's two things. one is certainly trying to take cost out and i think even more important than that is almost any enterprise is beginning to define themselves as a digital enterprise which requires that they build capabilities to put out applications either for the sales forces or directly for customers and suppliers even faster and the new deployment models that allow you to do that more quickly require new inpracticesin infrastructure and that's our open course software. >> who loses in that scenario?

>> the traditional i.t. companies, on premise, we call it legacy software are the primary losers in that world. >> like an ibm? >> i think they're all challenged. they all vaufrhave offerings in the space but they're challenged. they're seeing a lot of their traditional workloads go away. >> so they're doing well in their offerings as well. it's just the original stuff that was there, some of the services that go with that that you think is going to be challenged from here? >> i think all the legacy companies talk about solid growth in their cloud portfolios software as well. the issue for them is they're very very small relative to their base of legacy software and support. where for red hat, virtually all of our technologies are in the newer spaces. so we're not managing a legacy kind of decline trying to offset

that. this is all new for us and therefore positive growth. >> what do you see as your outlook for the rest of this year and into next year? >> well we guided on a constant currency basis 19% revenue growth. we're seeing a lot of demand. it continues very very strongly. we were named google's cloud partner of the year. that's because enterprises can run their workloads on red hat stack and run that on google or amazon or in their own data center so i think we'll continue to see significant adoption of technologies like open stack as people look to do private clouds. things like open shift as people look to build kind of agile platforms so across the board we're seeing strength in the cloud portfolio. >> all right jim, thank you for joining us today. we appreciate your time. >> happy to be here. thanks becky. >> i could have sworn that the white house was named google partner of the year. was it red hat? >> ha ha ha. >> one visit per week.

>> we just talked about that yesterday. >> that's why i just said it. why didn't you just say it. why don't you come up with something like that one of these days. >> i'm not as quick as you. >> no you're quick. you're worried about repercussions from the man. the corporate man down the street. >> i thought barrack was going to call. >> coming up oil prices jumping. stock futures falling. the market stories driving today's trading session next but as we head to break a look at yesterday's s&p 500 winners and losers. ♪

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welcome back. stock futures pointing to a lower open this morning. nasdaq looking like it would open down about 44 points off. s&p 500 looking down as well. that's off about 13 points. it's a topic we have been talking about all morning and now we need your help. we want to know what story you're buzzing about today. is it oil, bio tech small cap stocks. is it something you read you think the rest of our viewers need to hear tweet it to us and use the hashtag keep squawking and we will read all of them and share the best of the bunch. we'll do that at 7:50 eastern time. first a short commercial break. when we return the biggest winners from this year's ncaa

tournament miles nadal has the names that may surprise you. we're back in just a moment. ♪

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welcome back. we have been watching the futures this morning and after a down day for the markets yesterday with the dow down close to 300 points we're looking at triple digit losses right now for the dow pufutures. we saw things down by 150 points this morning. the s&p is also indicated down. the nasdaq off by 42 and it was down by 2%. energy prices have been bouncing

back. part of this is the dollar has weakened a little bit and wti traded in dollars. the other part is the move by saudi arabia into yemen to go after rebels. wti is up by about $1.90. that's a gain of 3.8%. wti at $51.10. >> when it comes to march madness the real winners are the big advertisers. the ncaa tournament has people glued to their tvs watching the ads and march madness final four ranking among the top ten sports events in the year. for madison avenue it's a big deal. here to talk to us is miles nadal -- i can do it in a million different ways. >> it's like nadal. >> and if physical resemblance. >> not the look but just the body. notice that. >> yeah. >> we should say chairman and

ceo. >> great to be here. love the new set. >> thank you. >> it's fabulous. >> you don't mind the action behien us all the time. >> i like it. >> i do too. >> i also like that it's five minutes away instead of 45 minutes away. so you're worth getting up for in the morning. >> thank you. he meant you collectively. >> well he was looking at you. >> so help us with this, on the advertising front one of the things we've just seen is a report saying procter & gamble reduced it's advertising on tv. a number of brands doing the same things. not so much in sports but elsewhere. long-tm, what are we going to see? >> let's go back to march madness and it's importance first. quite amazing. 140% growth in online viewership of march madness from 2012 to 13. 40% increase from 13 to 14.

75 million people will watch the final four. it's probably number three behind super bowl and maybe the academy awards in terms of its popularity and the viewership the loyalty that people feel to their teams is extraordinary. probably unlike anything other than probably world cup soccer. with regard to ad spend overall it mirrors gdp growth. 1 to 2% kind of growth. maybe 2 to 3 growth. so newspapers down 10%. magazines down 5%. 5% growth in television. online growth of 10%. so you've got big shifts of dollars away from traditional areas into the online space. what markers are doing, you know the famous quote i know half my advertising doesn't work but i just don't know which half? there's a big shift where people are trying to measure return on marketing investment. they're investing more in their

winners and starving their losers. >> but part of it is immeasurable. you'll never be able to measure certain areas of it or accurately. >> it's very astute. nonmeasured media is never quantified in this mix. they're only talking about measured media of advertising. so nonmeasured media is growing rapidly but nobody ever quantified that. when you see some marketers spending less money that's on measured media but they're all spending a lot more in social media terms. one of the areas that was interesting is pharmaceutical companies like merck was up 23%. >> spending broadly but not necessarily in a particular category? total ad spending. >> tv is always a staple and it's always going to grow. it will just have a smaller share of a larger pie overtime. >> but here's something that i

noticed in the shares chairs i have said i saw certain commercials, i've seen them 50 or 60 times in the last week there's nothing like basketball and specifically the end of the games where everybody has time-outs. if the game is close you're having a commercial, one team goes down and they'll make a couple of free throws and they get fouled immediately and they go to another time-out a lot of times and the commercial comes on again. in the last five or ten minutes of these games i'm seeing five or ten commercial breaks. i watch and never go anywhere. >> people are glued to their tv. they don't move. they don't go to the bathroom. they don't go do anything other than watch and there's two things that are important in advertising. frequency and reach.

>> is there any value in you advertising on a regular tv drama or comedy or something? because i don't think on any of those shows on demand or dvr that i've seen a commercial watching those programs in two years now. >> you're not the masses and your utilization of technology is probably more advanced. >> you don't think generational generationally they'll do that? >> part of the issues is you need commercials that resinate with the consumer. when you see something you like you watch it. if you don't you skip through it. >> on demand some of them you have to watch. that feature is not available. >> if you don't dvr it. >> less people are dvring because everything is on demand but also news. >> the critical thing is nothing has changed in the world from the point of view that says you need to have something that

emotionally resinates and creates a connection. >> you long facebook or twitter? >> we're both. you have to be both. >> such a cop out. >> you have to be both. >> and you're a canadian so you don't give a rats about this tournament. >> you got me into kentucky. i like those two. >> kentucky losing. someone has to -- west virginia says hey we give them props but they're going to be 36-1. i love that. >> i went to the final four four years ago. >> all right. coming up, mcdonald's ceo making his pitch. we'll talk to the top analyst about what she wants to hear from the company, next.

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here's a couple of stocks to watch this morning. sheers of sandisk are down sharply. the flash storage maker is cutting its current quarter outlook. wow. that is down. i'd call that down. and lululemon posting better than expected fourth quarter results but guidance fell short of estimates. that has that stock down about 6% so far in the yeerl session. newly minted mcdonald's ceo steve easterbrook is set to --

nicole, thanks so much for being here. >> good morning. >> what do you want to hear this morning? >> i want to hear more about technology versus menu marketing. i also want to understand what franchisees are suggesting to deploy. >> do you think that's likely? a new part of the ceo is he came from a marketing background. people think that's likely where the focus is going to be. >> i think that's the easy work to do and i highly suspect we will see and we have been seeing a tweak to the marketing ads. they're attacking their own menu trying to go for the authenticity or halo of good for you. i think they would attract more customers with technology. >> technology meaning what? walk in and order your own through a kiosk at the door? >> i think the point of friction has nothing to do with the menu. you still want to go to mcdonald's. they're convenient. they're on every corner. whap you don't want to do is

entertain the conversation of the person there. so you want to order ahead pay ahead, zip through the line, be able to move through one, two, three drive-thrus. have multiple windows. just eliminate the friction. >> perfect. that's what i was going to ask you. because we don't have a problem with anything right now at mcdonald's. we're pretty frequent because of my kids. but here's what i'd want. just make sure if i get -- i know they usually have a sausage and egg mcmuffin. if that's what i want make it really fresh and perfect. let me go to the drive-thru where i don't sit and wait and wonder what's going on where did you have to go to get it. do the technical things. go back to the normal quarter pounder. i don't know about all of the additions and the yogurt and all that stuff, but just get really good again at what you do. hot fries that are new. you know? fill them up all the way. i could do it. i could run that company, i think, and bring it back. would that give it enough growth to reignite the stock or not?

do they need more fancy stuff? >> protecting the mote would fix it. >> and you don't think they need to change the mix of the food, make it healthier? >> zero. zero. >> not even part of the equation? >> zero. >> fast and hot and fresh. >> yep. >> and still unhealthy if you want to view it that way. >> i'm just curious if that matters in the long run. >> do they need to shrink the menu? there was talk if you're trying to do too many would you agree with that? >> right now the customization is in the store and that tells you something. it has to be in and outside of the store. it needs to be on a mobile platform. nobody wants to customize. they just want a big mayc. you just want it fresh. they don't need to do anything with this but protect it. >> 105-year-old lady that said every doctor i have told me to

stop drinking this but i keep living. and the next tell me to stop drinking it and then he dies. anything in mod rag. you go once in awhile with the kids, right? >> i had an egg mcmuffin a few days ago. >> don't talk about that right now. >> i had two. >> do you get sausage? >> this case i had sausage. >> ever get just the sausage and cheese mcmuffin? >> yes. >> nicole what's your rating and price target right now? >> we went to neutral a couple weeks ago. we think the stock's going to be range bound for some time here the next 6 to 12 months. from overweight. >> thank you for coming in today. >> you're right, i think. you're good. coming up when we return jittery investors all around today. we'll talk about the stories sparking global market fears. "squawk box" returns right after this.

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market alert. futures falling sharply ahead of the opening bell. the chief investment strategy from jpmorgan private bank is here with a look at the selloff. saudi arabia launching strikes in yemen. the threat of more violence and disruptions grow. and shocking reports on the german german german germanwings plane that went down in the french alps. we'll bring you the latest as the second hour of "squawk box" starting right now. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business

worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. our guest host this morning is arthur brooks, president of the american enterprise institute. we'll get to him in just a minute. nobody doesn't want entrepreneurs in american enterprise many the country. you have 100% of the people behind you at least in terms of entrepreneurial spirit. >> yeah. everybody wants to have a system where you can have a dignified life, build your life have a lot of opportunity, have the right to rise as jeb bush likes to talk about. democrats, republicans, everybody. the problem is approach. >> i told you off camera i messaged someone that i just let you go and i get soothed. my anger dissipates. my disagreeability dissipates. it's like a bomb. it soothes, calms the savage press. >> cnbc pays me to come and make you feel better. >> and you do. i feel right but i don't have to be mad at people who are wrong.

>> that's right. the key thing is in -- >> i'm looking at you when i said that. >> i know i know. >> we've had six years of dividing leadership. >> now, it's not working. now my savage is being -- >> it spawns leadership on the other side as well. you have ceos on the program as well. when you have a dividing leader at the top, you'll create division all throughout the country. the answer is for democrats and republicans no matter who wants to be president is uniting leadership. that's what has to happen. that's the solution. >> or we could have the opposite. >> you keep your savage breasts over there. let's start this morning with the markets. stocks coming off a market that saw the s&p buckle more than 1%. the nasdaq saw it worse. down 2%. look at futures this morning. they are lower at this hour. dow still looking at a triple digit loss. looking at 108 points below fair value. it is off the lowest levels of the morning when we saw it off

about 150 points. the nasdaq down by about 42 points. joining us right now is kate moore. she is chief investment strategist at jpmorgan private bank. thanks for being here. >> good morning. >> this is a bit of a concerning time. we're trying to figure out what the economy is doing right now and what the fed is doing next. what's your take on the situation situation? >> there's a lot to be taking in. i find that we are obsessed with policy speak, not just out of the fed but out of the ecb. we're very very curious as to how the bank of japan is going to position itself this year. it's a very policy-driven point for us at this point. >> which is leading your asset allocation to what conclusion? >> to be more constructive on equities. we have a higher to equities than they have historically had.

and we're in the camp rates will raise in 2015. albeit a slower pace than we would have said a year ago. but it's going to be hard for fixed income to produce strong returns. so we're delltelling our clients i know you like fixed income but be creative about it. >> does that mean u.s. stocks or are you looking around the globe? >> we are global. we have a strong overweight market in asia. very selective about the kinds of stocks and sectors we've invested in there. we also have allocations to both europe and japan. we're u.s. dollar-based investors and we have see how this affects. >> we're now talking about the dollar back at 1.10. but it was down at 1.05. >> right. and that volatility gets people nervous. we see it as a possibility to hedge more of the exposure.

really over the next couple quarters. so, you know, we as dollar based investors, we want to be conscious. >> you have a simple premise. and i -- again, now i feel better about that too. if i could get rid of all the noise and just say there's nothing else other than equities that will bring a return and money always goes down hill to where it's treated best. you could ignore everything else that's happening if you knew for sure that you could get a return somewhere else. then you could feel confident in staying in stocks right? >> we also use alternatives as well. >> so it won't work to use stocks. i finally just had the answer. >> equities are going to produce solid returns. perhaps not double digit returns. and actually to balance out our underweight and fixed income we use more alternatives and hedge funds to say we're looking for places and portfolio managers that can invest the fixed income market, take concentrated

positions that can do pretty well. or historically low vol. and really kind of balance out more equity risks. >> you're talking about non-correlated things that go up when things go south. you're just talking about a way of lessening the beta and -- >> yeah. anything over the last six or seven years we learned that's not very easy to do and all correlations can go to one easily. >> i know you're going hate this question. but is there any value right now just sitting on the sidelines and just watching what's going to happen? would you be happier with a little bit of cash on the sidelines ready to pounce at some point? >> we have a slightly higher cash level right now than we started the year. usually have a little dry powder for moments we think we're going to see unjustified selloffs in the equity market. so we're going to really i think

take advantage of it throughout the year when we recognize this is going to be a much bouncier ride not just in equities but the entire spectrum. >> is this an opportunity right now where we see the dow back at levels we haven't seen since the middle of last year. or are you talking about a bigger selloff? >> we look for a selloff of a slightly higher magnitude. >> 10%? >> we're more looking at what happens to market sentiment after first quarter earnings. you know let's see how people digest the stronger dollar and weaker oil prices how willing they are to look through to more normalized earnings in 2016. and if they're not and they get a little bit jittery or we have a pause that softens a bit more. that could be a moment where we would want to be optimistic. >> zero, negative or just up a little? >> so where we think about knit a 12 month, we try not to be too cute on the first quarter. >> for the year? >> i think we're more constructive than a lot of the

sell side for example we think we'll see positive growth earnings even with a massive decline in energy. we're looking for low -- >> by the end of the year. first quarter could be a negative number. >> it could be pretty rough. but some of our big sector allocations particularly health care and tech and we have a nice position we built in some discretionary we think have much stronger earnings momentum. we feel pretty good about what we're doing from a sector basis. >> overall it's not totally extended but maybe biotech might be extended. maybe some technology is extended. they're going to be pockets of richness across the sectors. if you'd asked me a couple years ago, we'd be able to trade at 20 times forward multiples. that would be a moment to sell. but the truth of the matter is if it's the best growth opportunity, people are willing to hold those industries i think, at much higher multiples than they've been comfortable

with a few years ago. >> thank you so much. >> yeah. we have a couple of other stories we're watching this morning to tell you about. saudi arabia and its gulf arab allies launching a military operation in yemen. saudi-led strike targeting the rebels who have driven yemen's president from its capital. the action sparking worries that the middle east oil shipments of crude rising sharply in early trading. wti crude now trading at $51. also, story that's shocking this morning. shocking details on the german plane that crashed into the french alps killing all on board. new reports saying that one of the plane's pilots was actually locked out of the cockpit when the aircraft went down knocking on the door couldn't get in. that's what's on the voice recorder. we're going to have a lot more on that story in just a few minutes. our guest host this morning is arthur brooks president at american enterprise institute. i saw it yesterday, i think. is it in "the times"?

wherest where's the jeb bush story. is that in your paper, andrew? how jeb is never going to appeal to the -- here it is. conservatives are looking to unite behind an alternative to bush. when they say conservatives here arthur this bothered me. this irritated me. it depressed me. >> we'll get you back. it'll be okay. >> huckabee. i mean seriously? okay so the country has sort of moved on certain social issues. i know this for a fact. you stick with these issues the democrats win and they take us left on economic issues and ruin us on economic issues. in my view. i know i'll get feedback and tweets for that. but that's what i see. you cut off your nose on economic issues because you're not elected and you're not

governing. >> the biggest problem is the conservatives when in debates tend to leave too much oxygen in the debate which is consumed by the left. it's consumed by the media who try to force politicians into talking about divisive issues. the way you solve this in politics they don't understand this, is you consume the oxygen with the message that you want. when somebody says what's your view on abortion you say i know what you're trying to do. we all have our personally held views. but let's talk about the social issues that everybody agrees on which is the lack of opportunity for people in the bottom in this country. you know, you have 24% unemployment. those are people who don't have the dignity to build their own lives. >> i just saw andrew. he's bringing you in. >> he's bringing me in. >> this is not just the media that does this. the party's base does this litmus test. we won't support you unless you sign my agreement that says you

will never raise taxes. >> that's not a social issue. that's an issue that i agree with. >> you were talking about issues that then pull people into those situations. >> that's one of the good ones. >> the key is once again that leadership means that you control the message and you bring the people along who agree with you in the main. that's what unified leadership is all about. we have too many people with their finger in the air say where do people want me to go. somebody else has the oxygen in the debate when you do that. that has not favored conservatives for a long time. that's the way romney lost. >> the only thing is you will hear from the democrat that they have the answer to ep hadding the bottom you talk about. >> so we have to have the answer i mean conservatives. that's what we need. we need a big rumble in this country about who's more pro-poor. that will benefit poor people by the way. that's the competition of ideas that america needs. >> one party says its redistribution of what we have.

the other says it's pro growth policies that you hope will benefit everyone. and the other says trickle down didn't work. and the other side says trickle down government doesn't work. >> let's basically say where does america want to be? equal at the finish line or starting line? that's what we have to decide. that's the difference between right and left in america today, by the way. income distribution versus opportunity. >> i agree. it's between pro growth and redistribution. that's the two things. >> that's the argument we want to have. you know what joe? you win that argument. you always win that argument. >> i know that. but it doesn't -- i mean he never tells me that i win. >> because he agrees with you on that. you're on opportunity guy, right? >> i'm an opportunity guy. >> we had van hollen on the other day. i said do the earned income tax credit. do this now. >> not the minimum wage. >> yes. let's help people. let's do some pro growth stuff too with regulations or -- >> what'd he say? >> he said trickle down? you still believe in trickle down? trickle down doesn't work joe.

you don't watch that that type of trickle down stuff doesn't work. back to infrastructure minimum wage same ole same ole. >> why not the minimum wage? it's bad for business. until we start fighting against policies on the left, we have to start fighting for people in america. and so we basically say -- don't call it trickle down. call it whatever you want. >> we need tho grow the pie. >> pro poor to allow them to work that pushes entrepreneurship down to the bottom. so a guy that wants to cut lawns, it's an entrepreneurship. not just a guy who sets up a billion-dollar firm. we want a guy supporting his family for the first time. the only way is with opportunity policies. >> how do you deal with the issue of inequality which is to say you can pay attention to the poor. but the other issue in this country is just the distinction, the gap. i don't know if we need to worry

about the gap. there's some people -- jones came out a week ago and said the gap unto itself could create a civil war potentially. >> that's a common argument now amongst very very rich people. less income inequality so people don't come take our stuff. so the point of the matter is in america, poor people and middle class people and working people are not envious if they feel that they have a pathway to succeed. and succeeding by the way, does not mean becoming rich. it means being able to build your life and support your family. opportunity means no envy. no envy means no worrying about opportunity inequality. >> why aren't you running? >> i'm president for life of aei. >> really? you should be. >> there's no tenure. >> i have tenure like you have tenure. >> right. that's not good tenure. coming up next an update on the shocking report that one of the pilots on the germanwings

flight that crashed may have been locked out of the cockpit. then the unintended consequences of minimum wage hikes. the impact on small businesses in cities that raised minimum wage. and we'll talk to an analyst about the selloff in a sector that has been on a tear over the last year. we're back in a moment. f "no regrets" ♪ plays throughout ♪ ♪ ♪ ♪ ♪ in my world, wall isn't a street. return on investment isn't the only return i'm looking forward to. for some every dollar is earned with sweat, sacrifice, courage. which is why usaa is honored to help our members

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welcome back to "squawk box," everyone. some shocking reports on the germanjer germanwings flight that crashed into the french alps. phil lebeau joins us with more on this story now. >> there are multiple reports that the cockpit voice recorder does show one of the pilots was on the outside of the cockpit door knocking trying to get back inside. here are the latest. and we expect to hear more details perhaps within the neck hour in france. one of the pilots can be heard in the cockpit voice recorder knocking on the door repeatedly. it's unclear which of the two crew members was outside and which one was inside. by the way, the captain of the germanwings plane, 6,000 hours of experience. the co-pilot 630 hours of experience. one person who listened to the

cockpit voice recorder says the guy outside is knocking lightly on the door and there is no answer, the investigator said. and then he hit this door stronger and no answer. there is never an answer. all of this brings up the question, what's the protocol when it comes to cockpit doors that are reinforced to keep a potential hijacker from entering? it does have key pads on the outside of the cockpit door so if somebody on the outside -- if the pilot on the outside has to enter into the cockpit, they can press a code in order to get inside. however, we should point out that the airbus a-320 cockpit does have an override switch within the cockpit. we're going to have a press conference coming up with french prosecutors in about 15 minutes. but the question now remains, who was outside, who was inside, and why was protocol apparently not followed. you're supposed to have a member of the flight crew inside the cockpit when one of the pilots

leaves. certainly a lot of questions that remain to be answered. >> thank you for that. we're going to continue to ask some of those questions, get some insight from an industry analyst on the set. industry veteran john cox is joining us now. good morning to you, captain. what do you make of this story? what do you think actually happened inside the cockpit? >> well we don't have all the information yet. overnight there was initially one report. now there's a couple more. we're going to know a lot more from the official process conference that's coming later in the morning. and i think that we need to be a little bit patient with that. the fact that one of the flight crew members got up to -- and left the flight deck that's not that unusual. physiological needs. and that's a reasonable time in the flight to expect that to occur. >> beut not being able to get back in.

when you see these reports, do you think first subterfuge meaning the pilot inside was looking the other guy out? do you think he fainted, had a heart attack lost consciousness and that's why he wasn't responding? and then there's the issue of a key pad on the outside of the door which apparently would let the pilot in if he could plug it in. do you think he forgot the code? i mean walk through some of the permutations here. >> well first, the fact that there is a key pad and the code is known to the flight crew members. so it's not if just one person forgot it. if that occurred which is unlikely, they can get that code from other flight crew members. so the door was quite likely in the override mode. and that's a deliberate act. and so we don't know why it would be there. we don't know why a flight attendant would not have been in the flight deck. and they can physically open the door from the inside regardless of the position of the cockpit door lock switch.

so there's questions there. and this adds to a number of questions. why did the airplane start down? why did it not level off at an intermediate altitude? why did the crew not respond to automated warnings when it got close to the ground? there's a number of questions here and the fact that one pilot is up and out of the flight deck is not that unusual, but why they did not -- were not able to get back in is unusual. that's certainly one of the questions. and what's on the flight deck -- or on the cockpit voice recorder. hopefully that is information that will come out in this press conference. i think with this much pressure from the media and the public i think that the french government officials, the investigative authority and potentially the police are going to have to provide some answers in pretty short order. >> captain, thank you for joining us this morning. >> my pleasure. when we return this morning, we'll take a closer look at the big pre-market movers.

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>> don't hold it. you could hurt yourself. slip is disk. speaking of disks, sandisk cutting its -- >> nice segue. >> yeah. big bucks. the company cites weak enterprise sales in pricing in that stock. that's gotten a little bit better. down ten which is like a 12% move. and shares of lululemon are trading lower. the company's current quarter forecast fell short. i think they were okay in the quarter just ended. then the forecast is lower. where are the futures? is it still triple digit? i haven't looked. >> close. just under it, i think. >> just under. okay. so we're at 96. we're below for the year now. dow's down for the year. up next the effect of minimum wage hikes on business and on employment which is both sides say they've got the data to bolster their case.

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welcome back to "squawk box," everybody. our top story today is the global markets. we've been watching the futures and they've been under pressure this morning. this is about the best level all morning. dow futures down about 85 points below fair value. s&p off by 10. nasdaq down by 38. remember yesterday was a very rough day for the markets. the dow was down by prip l digits. technology stocks. the nasdaq was down by 2.3%. oil prices this morning up this morning on news of saudi arabia strikes in yemen. after the strong gains we've seen recently have combined to put wti above 50%$50. horrifying pictures coming into

the newsroom from the heartland. blaring sirens alerted that the oklahoma city area was ready for a deadly tornado that wreaked havoc in the region. one person reported dead after severe winds demolished a sand springs mobile home park. authorities also say between 60 and 70 people including children were inside a gymnasium when it collapsed. multiple injuries have been reported. now we're getting to the minimum wage discussion. having unintended consequences across the country. so much so that small businesses are being forced to shut down and significantly raise prices. and that's the subject of our next op-ed in today's "wall street journal." it was called the unappetizing effect of minimum wage hikes. and michael, this has been discussed so many times that i

know half of the viewers -- maybe not our viewers -- but there are a large percentage of viewers who say here we're going to hear the same ole, same ole from the right on minimum wage increases when it's been proven if it's a slight increase that it's actually a positive effect for everyone around. the ones you're talking about are some pretty big hikes. they were in san francisco and other places. right? >> yeah. that's right. so i think what's different about this situation we're seeing now is historically the minimum wage has gone up. and you have seen some reductions in employment. you've seen reductions in hours for employees. you don't tend to see lots of businesses close. when you have a place say we're going to 15 on an aggressive schedule. or oakland raises by 36% overnight. then you have businesses that say i've got to raise my prices by up to 20%. if i can't do that i've got to close entirely. so i think we're seeing a new paradigm of the minimum wage debate that we didn't know how bad the consequences would be. >> i hope what we're seeing

is -- because there have been a lot of test tubes that people point to where all the variables have been controlled. and you can come to whatever conclusion you want based on how you do it. are you seeing that there was no other mitigating factors in san francisco other than -- what did they go to? $15. you're seeing a direct cause and effect that some businesses had to close because of that? >> i think so everyone's going to have mitigating factors. but to give you an example. a gentleman who ran a restaurant called the abbott seller was named one of the top 100 restaurants in the city. he said yeah rents are high there's health care costs that are high. at the end of the day we'd still be open if san francisco wasn't going to 15. that's pretty conclusive for me. >> now, the other side would say we're not talking about 15. we're talking about 7 in most places. and you'll hear -- you know they'll talk about -- what get mes is they'll talk about that a

family can't make ends meet. we need to do something as if going from $7 to $9 is really going to help anyone. it'd be better just to create more good jobs for everybody. >> i think you need to talk about what you want to accomplish. we've raised in the past in smaller numbers. we've looked at states that have done that. we haven't seen a measurable reduction in poverty. because it's poorly targeted. we're in favor of better targeted alternatives. >> when i look at the data which we do at the american enterprise institute just like you do all the time the truth is when you move up just a little bit, you don't see dramatic increases. it's important to be honest about this. what we see is an asymmetric impact. the problem is not the average average minimum wage increase nobody's average. you have to look at the impact that has on poor people the jobs destroyed at the very

bottom. talk to me about that. what do you actually see happening for the most vulnerable people asymmetrically as a result of these? >> that's exactly where you see. it must not have had an effect. what we look at is folk who is tend to have less education, experience. these are the folks where you have a job waiting tables that they are placing an order via touch screen versus someone to work their way up. >> what's the answer then? >> i think the answer if going back to something like paul ryan and president obama support. it's still going to boost paychecks but through the tax code instead of a margin on employers. >> we talked to an analyst this morning and she pointed out what

she'd like to see mcdonald's do is move towards technology anyway. forget about the arguments about whether the minimum wage raising would push to do that. they want to see that happen. if we talk all the time about how it will kill jobs because they put in new technologies that's going to happen anyway. >> the way i look at it is are we accelerating a trend? 6,000 locations made the decision to do that. and they made those decisions driven by, you know higher labor costs. is it possible 25 years from now mcdonald's of the future looks like something from the jetsons? that is possible. but accelerating that at a time when teens are pretty high close to record levels is probably the wrong time to do that. >> to get it straight you're talking about productivity that is being accelerated that throws out the least skilled, most vulnerable workers and hurting the poor is that what we're sighing? >> that's exactly right.

we're taking away pathways that historically existed that allowed people to get practice. >> i'm guarantee you if -- >> maybe the other one. >> i think you're right. media matters might have been set up by conservatives to look so ridiculous that people say that can't possibly be a real liberal -- anyway. that's neither here nor there. we all want the same thing. i guarantee you i will read articles from the left that will impugn everything you said and throw your studies out the window and say it's proven that minimum wage helps people and we have to do it. they do. i don't think these are bad people that want to increase inequality and hurt the poor are they? >> i agree. we do have the same goal which tends to be we want to reduce poverty. we want to find a way to boost wages at kind of the lower end of the career ladder at the job market. but i also think we have to work off a common set of facts.

when you have someone like the budget office that looks at the research, it's them doing it. we >> they also say on both sides, it also said it would raise wages for some of the people at the bottom. something for everybody. >> i guess if the tradeoff is 900,000 out of poverty, i wouldn't take that deal. >> what they're talking about the low wage earners that would benefit are my kids the teenagers. 33.2% unemployment among african-american teenagers. you have poor people with relatively low education who are the most vulnerable to be thrown out of work and my teenage kids who are third and fourth and tenth earners in upper income households that do just find. then you look at the average and say that helps poor people that's wrong. >> you don't think it's students and second and third jobs.

you think it's wage earners that are supporting a family. >> that's the question. that's the way it's been portrayed. it is wage earners trying to support a family. you're saying it's not. >> you can find some if you're at a newspaper. . >> i think you can find some in this instance. >> if you look at going to $10.10, about 10% of the people who would be affected by it are single parents of children. so i think the question is what's the most effective way to help them. the earned income tax credit the specific thing that needs to happen is it needs to be expanded to help people who are single, people who are childless adults. >> you're talking about men, by the way, who have non-custodial care over their kids. these are the people nobody is sympathetic to but need the most help. >> makes a lot of sense on that. what about the republican budget that strips away child care tax incentives that are there. those are the people who probably need that. >> i think it's absolutely fair to be critical when you see policies on either side that you think are counterproductive.

when some republicans spoke out about expanding the earned income tax credit, i don't think that's productive. if you're opposed to raising minimum wage you need a positive alternative. >> thank you. >> thank you. when we come back this morning, red arrows for biotech stocks. the biotech stock down in the last week. we'll talk to an analyst after this. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long

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welcome back to "squawk box." we've seen a gradual sort of improvement. we were down 80 not too long ago. now down 97 again. we'll see after the session goes on after 300 points down yesterday. june approaching some day. right? what is it march? it's still march. >> it is. barely. >> until the 31st. >> my dad's birthday today march 26th. >> okay. happy birthday. >> happy birthday. >> mr. dad. bob. biotech stocks are under pressure this week. we explained why they were probably going to go higher on monday. had its worst daily drop since december. here with us on set is research analyst at cowen and company.

we had the ceo on of biomarin. and i was asking the normal questions about normal valuation metrics that don't really work right now with biotech. but there's a lot of -- it's different this time analysis as to why it is justified. just a brief sort of a cooling off of excitement. or did it get out of control? over extended. is it at $400? some have higher market then. >> there's no doubt there's a reason that biotech has out performed the s&p or broader markets for every year the last five years. the business of biotech is good fundamentally. if you have a drug it's literally worth more than its weight in gold. you have a growing elderly group of americans out there with insurance. great business model. perhaps we got a little

extended. there's been some froth in the industry. >> do you think any of it is tied to the amount of liquidity that's out there, the amount of money that's seeking a home? >> no doubt. especially health care funds and has to be invested. we are riding a bit of a wave. we could be extended. we've seen pullbacks like this before. they tended to be healthy. but when this is growing year in and year out 30% and these are companies that have earnings and rational fundamental metrics. but they're not extended in terms of their pe multiples, i think that's going to continue. >> i'd like to believe that there is in the not too distant future there's a quantum event happening where all this built up molecular biology knowledge where we do learn how to build. >> i hope you're right. it's hard to measure that.

>> but you could see that could be one of the nebulous reasons for why it's doing so well. because that is coming. >> it's a slippery slope to argue that. again, we don't have all the supporting facts to make that claim. >> it's still going to be painstakingly slow. >> but there's some great stuff going out there. there's no doubt the science whether it's gene therapy or engineered t-cells. really cool stuff. >> once you have the underlying metabolic process in all this, you're going to be able to go in and just design keys for the locks. >> still can't piece together a human being like a calculator but we're making progress for sure. >> all right. well we can -- you'll live to see it sorkin. >> live to be 500 years old. google is actually -- >> i'm waiting if that. >> do you want to live to 500? >> he does. >> you don't live forever. you live as long as you want. >> i'm not sure i want to make it to 70. >> you're with zeke e manuel.

>> easy to say when you're 35. so easy to say. wait until zeke's 75. >> no kidding. maybe 80 is what he'll say. >> 180. 380. anyway thanks. earlier in the show we asked you to tweet us the stories that you're buzzing about this morning. coming up next the topics that you want to hear more about in our new segment keep squawking. we're back in just a moment. hello. i am here to offer sophisticated investing strategies. my technology can help you choose the right portfolio. monitor it. and automatically rebalance it. all without charging advisory fees, account service fees or commissions. that may be hard to compute. but i'm a computer. so trust me. it computes. say hello at intelligent.schwab.com

postings, it looks like many of you are talking about the markets too. we asked for stories that have you buzzing. now it's time to share some of them. let's tell you about a couple of them. william sosa is having a case of deja vu this morning. he tweets we saw a similar story last year and how quickly people forget. a link to reuters from march 28th 2014 titled wall street ends higher but biotech selloff weighs. of course you can check out a one-year chart of the biotech index right now. but question are we in the same

place or is this something worst based from the last -- we just had a segment talking about biotech. >> the one thing that characterizes bull markets of any kind is the continuation where it goes higher. where like maybe someone that wasn't that sure it moves to the strong end. that's usually typically. sort of the water torture selloff that is the beginning of something more serious usually. but we'll see. >> we're going to take a because on this for a moment. we have some breaking news right now on the crash flight we've been talking about all morning. phil lebeau has news on that. >> i want to bring in a live picture from france right now. this is a prosecutor in france describing what was heard on the cockpit voice recorder. we've been listening to this press conference over the last 15 minutes and frankly, his description of the final moments of this flight are chilling. he confirms what the reports were overnight that one of the pilots, the captain, leaves the

cockpit. he's on the outside knocking to come back in. according to the prosecutor, you hear the breathing of the co-pilot and he says it is the co-pilot the one who had just 630 hours of experience all the way up until the plane crashes, you can hear air traffic control trying to reach the co-pilot. you can hear the alarms within the cockpit saying pull up pull up. clearly indicating that the plane was going to be flying into the mountain. and yet there is nothing, not a word from the co-pilot according to the prosecutor describing the cockpit voice recorder in france right now. so again, that is the latest in terms of what's happening with the germanwings investigation. chilling details from the prosecutor about the final moments of that germanwings flight. >> phil, just to help us clarify, they're hearing the pilot breathing. so this issue of whether the pilot had somehow become unconscious is no longer -- >> yes. >> he could still be breathing. >> that question specifically was just asked to the

prosecutor. his answer was it appears to be normal breathing. it does not appear to be distressed. in other words, this theory has been out there. maybe he had a stroke maybe he had a heart attack. and he passed out. according to the prosecutor it does not sound unusual. becky, real quick -- >> what if he just fainted? >> i think that's a possibility. there's no way or knowing for sure, but according to the prosecutor, it is normal sounding breathing -- >> only because, phil if you were doing something intentionally, ultd think the breathing would be different because you would have an elevated heart rate. >> in theory. i guess we're in the area of conjecture here. so real quick, we should also point out the prosecutor says that once the captain leaves the cockpit, that's when the altitude is purposely changed by the co-pilot. so he changed it so that it went into a descent. and we know that descent was about 3700 feet per minute. >> is there any intelligence on

commentary or conversations that the pilot and co-pilot had before the captain left? >> he says it's amicable and courteous. no indication that something strange was going to happen. >> no questions about -- what's the guy's name? what's his nationality? how old is he? >> those are all good questions. we have not been able to -- >> family? married? >> none of that. great questions, joe. that's all going to come out today. the background of the co-pilot is certainly going to be the main focus now. and you can see this head line here. you can hear cries just before the crash. there is no doubt if you're listening to these reports, clearly other people on that plane heard the captain knocking on the door saying get me inside. let me in. and yet if you're sitting there in a plane and you see that you're in descent into the mountains, i can understand why you would hear cries on the tape right before the plane crashed. >> okay.

phil le bowebeau, what a tragic story. thank you for bringing that noise. we'll follow the story all day. coming up we will have more information on the crash of that plane. we'll also be talking about the markets which are not in great shape this morning. we're coming right back. if you want to succeed in business, mistakes are a luxury you can't afford. that's why i recommend fast reliable comcast business internet. they know what businesses need. and there's a no-mistake guarantee. if you don't like it, you have thirty days to call and get your money back. with comcast business internet you literally can't mook a mistick. i meant to say that. switch today and get the no mistake guarantee. comcast business. built for business.

welcome back to "squawk box." first on cnbc -- first in business, rather right here on cnbc. i'm andrew ross sorkin along with joe kernen and becky quick. dow jones looks it would open 108 points down. and nasdaq off 42. check out europe as well. you're seeing red arrows across the board with the german dax off 2%. greece in a much worse situation. over 3%. oil touching its highest levels in more than a month on news of

saudi air strikes in yemen. michelle caruso-cabrera will have more than that in a moment. but now more from the tragic story. >> there have been chilling information coming out in the last few minutes. phil lebeau has been listening in to all this. he joins us now with more. >> let's call up the picture of the press conference happening now in france. i can summarize what the prosecutor has been talking about over the last 20 minutes. essentially he lays out that according to the cockpit voice recorder and listening to it it's clear that the captain left the cockpit, is outside of the cockpit knocking on the door banging on the door trying to alert his co-pilot to open up the door. according to the french prosecute prosecutor, there is not a word. just normal breathing up to the moment of impact. one chilling quote from the prosecutor, i think victims realized what was happening only at the very last minute. shouts can be heard only in the very last moments.

clearly he is talking about what he cockpit voice recorder was picking up in terms of people in the main cabin who see the mountains approaching, who see they're in descent, who clearly can hear the captain banging on the cockpit door trying to get back inside and realizing they are going to be crashing into the french alps. that's what he's talking about. these are chilling descriptions according to the prosecutor -- or these are chilling descriptions from the prosecutor as you listen to him describe the final ten minutes of the germanwings flight. and again, this is going on right now. this press conference. we're going to hop off here and try to get a few more details. clearly the focus is going to be on the co-pilot and why he deliberately set this plane into a descent into the mountains. >> and phil you know things move so quickly and everybody's minds jump to things so quickly. do you talk about it not talk about it. so now we're at this point.

then you go, okay suicide or terrorism is the next thing. suicide, i don't know. suicide with 150 people you take with you? maybe. then you think terrorism. and jets are still the biggest way of making the most casualties, most publicity and everything else. that's still the method of choice for any of these groups. and we don't need to mention any of them. some of them have stated let's go back to airplanes and start again. that immediately is what you think of isn't it? >> well it's a high-value target in the world of terrorism. >> right. >> and everybody knows that. that's not new. what's interesting here is people are going to look at the origin of the co-pilot his background. he is german according to the prosecutors. he had about 160 hours of experience. had only been flying for a year a year and a half. we're in the realm of conjecture

here. could this have been pilot suicide? possibly. if it was terrorism, you would think that there would be something claiming responsibility or some note that had been left. something indicating that it was terrorism. the fact that there is absolutely nothing that's the baffling part of this. >> yeah. >> it's chilling just to think -- i mean if you're sitting there and you're hearing this. >> it's a high-value target. and who knows. but we all think -- i don't know used to think al qaeda. now you think isis is on everyone's mind. they mentioned something two months ago, whenever it was, about there was some type of correspondence back and forth between elements that talk about airplanes. but, you know we're making so many leaps at this point. >> i will say this. as a business issue for lufthansa, i would imagine that the liability issue if in fact we find out this pilot did this

on purpose is so much higher than, for example, if you had a mechanical problem or you had a weather problem. i mean to actually have an employee of a company do this from a financial perspective i would imagine would be -- if you're a family of a loved one on that flight the liability issue in terms of monetary damages would be at a totally different level. >> you remember the egypt aircraft crash a few years ago? it turned out it was a pilot that crashed on purpose. what happened with that with respect to liability? do you remember? >> i don't. but i'll go to work on that right now. >> that's the only study where i can remember where a pilot did that. >> the mental state of the pilot should have been known or something? >> i think a court would hold the company -- >> difference between suicide and terrorism too? >> well then that becomes another question. is it a suicide? could it be considered terrorism? >> but now we know about all the

people on the plane that were -- >> they were awake and aware. >> watching the guy pound on the door. like the people saw the manhattan approaching on 9/11. now to the other big story. the saudi air strikes in yemen and impact on oil prices. michelle caruso-cabrera is here. you waited around. thank you. >> we have now what appears to be a proxy war between saudi arabia and iran going on in yemen. the saudis began bombing rebel-held areas of yemen last night. the sunni government of yemen is backed by the sunni kingdom of saudi arabia. on the run because of shia rebels known as houthis. from which the government had been operating. but the leader of the country escaped by boat. the air assault was announced by

saudi arabia's ambassador to the united states last night at the embassy in washington, d.c. >> houthis have then taken over the armed forces of the yemeni state. they are in control of ballistic missiles heavy weapons, as well as military bases and ports. the yemeni president, legitimate president of yemen was able to escape sanaa. >> in a note to clients called why yemen matters, yemen's descent is an opportunity for al qaeda in the arabian peninsula. there are threats of a potential disruption to the shipping of oil supplies going through the strait, the southern narrow entrance to the red sea that lies between yemen and djibouti. the reason for brent rising so sharply. >> thank you michelle. all right. futures are pointing to a fourth day of losses on wall street.

off their session lows. joining us now is brian belski chief investment strategist and guest host arthur brooks of the american enterprise institute. and you're sticking around. she is sticking around for the conversation. we saw the sun yesterday and the day before but not to the extent you're glowing over there. did you get back from somewhere? >> well, two trips. one quick to see the twins play in ft. myers, florida. back to work. and then to arizona to join the family for a couple days. >> arizona. that was a simple answer. now we have no time. arizona. there's sun in arizona. >> there's sun in florida too. >> okay. so you are, like one of the most bullish long-term of the people that we have on. so that's probably not going to change. what do you make of yesterday? fed last week? we went up 300 on removing

"patience." what a difference a week makes. >> there's a shorter term story and longer term story. short-term is you had a biotech analyst on last hour you had pairing back gains. it's very clear that most institutional investors around the world have a high tracking error in areas like biotech. they've been depending upon the area for returns over the last 12 months. over the last five years health care in the s&p 500 are hitting all time highs. health care is a crowded space. so what you've seen is as volatility increases which is part of 2015. as volatility increases, they are going as they fear. >> with the winners they pair it back? >> sure they do. >> what did you just call it? you called ate crowded -- >> a crowded trade. >> would you call apple a crowded trade? >> apple's interesting.

because apple we think is kind of a microcosm for the united states stock market. >> so do i. >> meaning continues to go up and people doubt it. apple was used as a redemption tool. they would sell some apple shares to meet redemptions. the second half of 2014 that's when investors started to get back in again in apple. now they're fully invested. so apple is not as crowded, i would say, as bioteches are. >> more crowded. it's in the dow and the dow is going to move with apple. >> right. exactly. >> historically for years now, the market has looked through every bit of overseas concern. all these geopolitical issues we faced. the selloff of the last couple of days do you think there's anything in it related to what's going on as we see the middle east just literally rip apart at the seam? >> you have the middle east issues confounded with this pullback in oil. so that's part of the longer term story. the longer term story that investors are having a hard time

with are two things. number one, what i like to call the great unwind of the prior trade. means emerging markets, commodities, credit, small cap. investors are still trying to hold onto that and it has not worked. so they're having a hard time segueing to the new trade which is america. brings us to the second point they're having a hard time dealing with. the reality of qe is over. right? in this notion of strategyies you buy stock because of qe. as the dollar goes up the economy goes up, stocks go up. and people don't really believe that. that's why we've seen this type of volatility this year. when we have these short-term events, oil being low, all of these trades unwinding from a longer term perspective. >> one of the things that -- when you grow up on the west coast like me every time something shakes a bit you get in the doorway. is this the big one. we can explain what's going on.

the price of dollar and price of oil. yet we run in the doorway which makes for disproportion in volatility in the market. is that the way to look at it? >> i think it is. everybody can't wait to call the end of the bull market. we're consumed with trying to call the end of this just like we're consumed to call the end of apple's run. bear markets don't happen when everyone is looking for it. that doesn't mean we can't have a cyclical correction here. which is very healthy. >> what does that mean by the way? how much? >> any time you try to put how much on it the market needs to have a bit of a respite. it's healthy to kind of pull back here reset the stages. i think that we're heading into an era where less about macro, more about fundamentals. portfolio managers are going to be sticking to stocks they like. as the market goes down they're going to be adding to stocks. as they market gets extended, they're going to pull back on

their positions. so if you run a portfolio before, you know what i'm talking about. say you have 40 positions. market goes up and moves away you peel back market goes down. you add a bit. and that's the peter lynch rule of investing in the '70s and '80s. i think we're going back to that. >> any knocks on the headline about this airplane? does that have any -- >> i think it does andrew because there's so much unrest. right? and really people talk about the great rotation. hasn't even begun yet. the american consumer walking down sixth avenue here is not convinced that we're in a recovery. and you hear about planes going down, hear about terrorism, hear about the election coming up. a lot of people are uneasy. when they're uneasy you freeze. and i think that's -- we're entering a short-term period where the retail investor could actually freeze here for a little bit. >> things keep coming up. 630 hours is nothing. >> flight hours. >> for the co-pilot. he was really young too.

>> he was 28, i believe. >> i even saw younger. i don't know. how long did those guys in 9/11 -- they went and took lessons. it was years, right? >> years. six months to a year. >> not completely out of the question for someone to be -- to have gotten the stupid job in the first place. who knows. who knows what's finally going to happen but 630 hours. he wasn't a pilot for that long. that's a terrible thing to think about if that's the next step that you actually go get a job based on something you plan to do. >> like a deep sleeper cell. >> then changes the dynamic of all airlines to do background checks. consistently updating and following them. >> taking over you learning to fly and taking over the come pit versus being in the cockpit. that's frightening. but who knows. >> when we come back we're going continue this conversation but also jim bullard speaking in germany earlier this morning saying that now may be a good

time to normalize monetary policy. atlanta fed president dennis lockhart joins steve leisman for an interview. and then later breaking news on the jobs front. trading the selloff. richard bernstein and dennis gartman debating. and then jim cramer, what you expect on his radar. when "squawk box" returns. 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

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welcome back everyone. atlanta fed president dennis lockhart will be speaking in detroit later this morning. but before he does, he joins our steve leisman for an exclusive interview. >> thanks very much. i am here with dennis lockhart at the engage conference which brings together 1300 students of finance around the country. thank you for joining us. >> thank you, steve. >> a lot to talk about the markets. selloff going on. i want to get to that. but first let's get to the economy. we've had a pretty steady string of soft data recently. how nervous does it make you about the economic growth outlook? >> i think we're still on a solid track. however, the economy is throwing off mixed signals at the moment. and i think that's going to be passing or transitory. but the first quarter looks very soft. >> what are the factors that

you're blaming the recent softness on. how much does the weather have to do with it? how much does the dollar have to do with it? >> certainly february weather is a factor. and talking to some of our contacts, it was broader than even the northeast. it was -- there were elements of weather effect on the economy more broadly across the country in february as we hear it at least. clearly the oil price fluctuations that we're seeing down now back up a little bit. maybe having some influence. we do hear a fair amount. i had an energy council meeting just two days ago. we hear a fair amount from people if the energy patch that investment is falling off. there are some layoffs taking place. so i think these things are likely to be transitory. but the first quarter as i said looks very soft. >> what about the effect of the

dollar which has an effect both on inflation and growth? how are you processing the recent strength of the dollar? >> we're watching the dollar and i would say the impact of the dollar is something i have upgraded in terms of importance over the last several weeks. clearly it has an effect on prices. we're seeing imported goods influenced by a strong dollar. also net exports which is an important component of gdp. obviously influenced. i think some of the manufacturing order numbers may reflect export influence. so the dollar is a factor and is -- has the potential being a slight drag on the economy. >> is it more negative than you originally suspect snded? >> i think it's more of a doubt or more of a question mark than i originally suspected. in the beginning when the dollar declined, i was prepared to some

extent dismiss the influence of the dollar as being not great because our economy is not so export dependent. but i'm upgrading it as a factor to watch. >> i'm not going to ask you about yesterday's selloff. because i don't have a clue. i don't know anyone has a clue. >> do you know where yemen is? >> exactly. maybe it's that. but i understand the recent swings in the market. on the day you took the word "patience "patience" out, it shot up. and does it make you nervous about how they're going to react? >> i have a colleague who called that the temperance tantrum. it has been a lot of volatility. i think we're sort of in a two-minute drill here as we work down toward a date in which we will likely begin the process of raising rates. so perhaps markets are getting a bit more nervous. i know markets -- people

participating in markets are positioning. and they're trying to make some judgment as to the timing of a possible liftoff. i was a bit surprised by the volatility of the market when we made that announcement. but i think it shows you and yesterday's selloff shows you the sensibilities of the market. a little fragile at the moment. >> let's go to your sense of timing. you said recently and i thought that was a change in your rhetoric your language that june, july and september are being given serious consideration. what does that mean? >> it means i think they are as janet yellen has said live meetings. they certainly should be on the table in which meetings in which a decision should take place. i have said for quite some time i see it as mid-year or a little bit later. so i think, you know we're coming to a point we're going to

seriously look at a decision to raise rates. >> however, when you do that and we talked about the dollar earlier and the impact of it that's going to separate the united states even further from our trading partners. does that worry you the united states gets further out in the direction of policy? >> the divergence in monetary policy is a factor that i think is driving the dollar appreciation. so in that sense we're seeing the dollar strengthen as i said earlier, the strength of the dollar could turn out to have some drag effect. i don't think it's going to be terribly significant, but some dampening effect on the economy. and that is a result of the divergence of policy. >> i have to ask one more question which may be the most important here. could you tell us inned a much details a possible what are the two criteria for raising rates look like to you? and what does confidence that

you're heading back to the 2% inflation target mean to you? >> well let's take the job market. i think that's fairly straightforward. i would -- and i'm sure my my colleagues would like to see a continuing drop in a u-3 unemployment rate. the conventional measure of unemployment nap would probably mean we would see a continuation of the strong payroll jobs numbers that we've seen now for over a year and of course the last number 295 was extremely strong. so a continuation of that pattern. it doesn't mean we're going to see numbers quite as strong as last month, but nen tles continuing jobs creation. then i would like to see the other measures of underemployment and unemployment begin to tighten with the unemployment rate. that is part-time for economic reasons. marginally attached. >> it has to do inflation

quickly. >> okay. on to inflation. i think inflation has more subtleties associated with it. in all likelihood we're going to be looking over the next few weeks on very soft numbers. >> right. >> and so i would be parsing the numbers in a number of different ways to try to get confident that our expectations of rising inflation are very likely to develop. >> okay. we'll leave it there. back to i think andrew from here in detroit. >> thank you for that great interview, steve. coming up we'll talking about unrest concerns and the dollar strength. lots to cover on the markets this morning. we're going to find out what will be driving the trading session today with dennis gartman. back in a moment. 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

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french officials holding a news conference on the germanwings flight that went down over the alps. chilling information coming out. phil lebeau joins us with more. >> we now know the name of the co-pilot who was alone in the cockpit as the germanwings flight crashed into the french alps. his name andreslubitz. he was fully certified, a german

citizen. we don't know any further details about him. prosecutors will be talking to his family. this press conference that just wrapped up according to the prosecutor, mr. lubitz manually and intentionally set this plane to fly into the mountains. he describes the voice cockpit recorder in the final minutes which the captain left the cockpit cannot get back in and can be heard knocking on the door pounding on the door. then according to the prosecutor in the final moments before the crash, you can hear shouts and screams on the other side of the door. clearly people in the main compartment who know that they're going to be crashing any moment and hearing the captain trying to get back inside the cockpit. so that press conference just wrapped up. we should also point out that the ceo of lufthansa will be holding a pretssss conference at 9:30 this morning.

more details will be expected at that time regarding andreas lubitz who was alone in the cockpit when the germanwings flight crashed. >> thanks phil. stick around. stay close. captain john cox joins us once again this morning. he's the ceo of safety operating systems. it just occurred to me again, captain, that you want the code to be able to get in but then you figure someone out there that has ill intentions can get the code. so you need something on the inside to deactivate the code for working on the outside. but now you need another layer where you need someone to be able to override, someone deactivated it inside. i don't know what you do with this. but with all this new information, what do you think? >> well i think this is a tragedy of almost unimaginable magnitude. for a professional pilot to deliberately crash an airplane i -- i'm literally virtually speechless at the even concept of that much less the actual

event. that said in the post-9/11 world, the security issues around flight desks was significantly changed. and the protocols for most airlines include the fact that a flight attendant will come in so there's always two people in the flight deck. and this is one of those layered approaches to ensure that the proper people get in and out of the flight deck and no improper people get in or out. i'm sure without question that those security protocols are going to be reviewed and the exact protocol in place at germanwings is going to be scrutinized very carefully. and out of that i think will come modifications that will provide the best level of security and safety combined going forward. >> i have two questions for you. that protocol just described, is that global or just in the united states? >> it's certainly in the united

states and widely used around the world. i have conflicting information on the research that i've done this morning over whether it's required in europe and whether it was required at germanwings. >> and background checks for pilots. both when they are new pilots and then is there any ongoing process in the united states or elsewhere? >> background checks are very common for pilots when they enter flight school today as well as when they're hired with the airline. ongoing if there are psychological issues that might come up that other crew members notice a psychological evaluation can certainly be required. but it's not that common. and there is some variance around the world as to the depth and frequency of background checks. so it's not something that you can say that it's done to a single standard worldwide. >> so flight school certification and then getting hired and 630 hours. how long -- what's the minimum

amount of time? >> i think typically flight school is 18 to 24 months if you go full-time. and the european systems are very rigid. they're much more like the u.s. military systems than the traditional civilian training. these programs are well proven and the accident and incident rate in europe testifies to their effectiveness. so the low flight time for this individual is not as indicative of a problem because of the type of training coming through these programs. >> phil? >> john this is phil lebeau. i'm curious from your standpoint we all know there's generally speaking a global pilot shortage. and it's only going to get worse as we see airlines add more flights and they expand particularly in southeast asia. do you have any concerns about the background checks that are

going to need to be done with these pilots as we start to bring more pilots into the system? and clearly they're trying to crank them out of these schools as quickly as possible. >> no. i think that the standards will remain high and the challenge is going to be to keep a large enough candidate pool to have them enter the flight schools. the flight school training for commercial pilot is very rigorous. the academics are very rigorous. and all of the competency checks that go along with that process are very rigorous. i don't look for those to change because that's the standard that we have set as an industry worldwide. and that's to a large degree how we've managed to make aviation as safe as it is. i don't think the standards will change. i think the challenge is going to be to get the right people in the candidate pool and to maintain those standards. and i think that's where we're going to have the challenges going forward. >> okay. thank you, captain.

we appreciate you coming back and joining us with the additional info. we appreciate it. >> my pleasure. we've also been watching the markets today. they have been under pressure after a very difficult day for the markets yesterday with the dow off almost 300 points. this morning it looks like the dow futures are still down triple digits. it looks like the nasdaq down about 50 points below fair value. s&p futures off close to 15. right now we're joined by richard bernstein. richard, we've talked about how people are getting nervous. it's fluctuations with the dollar at this point, volatility in oil prices. some of the headlines from around the globe too. what do you think? >> well becky, we're still very bullish. but i think we're in a period here of tremendous uncertainty. that probably isn't necessary in some cases. not only do you have a situation that we've been talking about this morning and everything

else, but you've got to situation where dollar's been strong. that's been a negative effect on earnings. and you have the fed at the same time i would argue threatening to raise rates. i know joe would not like that word, but they're threatening to raise rate. that historically is withdrawing liquidity from the markets. >> raising rates from zero. >> he's one of the guys. he's in the club. >> no. markets don't care about the absolutes. the market doesn't care if the fed funds rate is a zero or a half. >> i would argue the fed says it's not tightening and it is tightening. >> that's absolutely true. otherwise why would they -- >> they're 3-year-olds? >> that's the whole point of a cycle, joe. things get better better better. then they get worse, worse, worse. that's what markets respond to.

emerging markets have been growing faster than the united states for a lieng time. but the stocks have been underperforming. they're in a down cycle of growth. it's getting slower and slower yet growth is still higher in the united states. it's the changes that make difference in the market. the fed goes from 0 to 25 basis points. they have to make sure that the economic statistics will improve enough to offset the negative effect of rising rates. >> so you think the quarter point is actually going to make the difference. >> it depends. then the question is what happens to the dollar. the dollar's already been strong. raising rates is not going to make the dollar weaker. you can see what's going on in the market. >> so when you add all of that up, what do you think this year looks like both for the markets and for gdp? >> i think last time i said cooler heads on the fed will preview. i think they're not going to raise rates. >> that's the way you say it. they're going to wimp out -- >> it's not wimping out. >> not dofree lunches for everyone.

why ever go up, rich? >> no. >> free money. what if we print $100,000 for every man, woman, and child in e the country. how can that be a bad thing? >> that's not what i'm arguing for, joe. >> but is that a bad thing? why not do it? if there's no bad consequence. >> you and i both know that's not proper policy. >> but staying at zero with 5.5% unemployment is proper policy? >> what is nominal growth in the economy? >> numbers lie. liars number. how's that go? >> figures lie. >> you cannot say monetary policy has not been effective and then say we're distorting the economy. >> go main line some more qe bernstein. good god almighty. >> thanks for joining us today. coming up next dennis gartman, we're going to get his take on this morning's big moves. and then jim cramer sounding off. "squawk box" returns in just a moment. intelligent driver-assist systems. it recognizes pedestrians and alerts you.

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welcome back to "squawk box." live shot of the white house. we've got an update on the top story of the morning. the french prosecutors leading the investigation into the germanwings crash in the alps. revealing chilling details. here are e the details that were just released. the captain was locked out about

ten minutes before the crash. co-pilot was alone in the cockpit. they've identified him as a 28-year-old german national named andreas lubitz. he sent the plane to descent mode and refused to let the captain back in the cockpit. he was heard breathing on the recorder until the plane crashed. terrible story this morning. >> now they're really going to ramp up the trying to figure out, you know, look into this guy's background and everything else. crude oil prices up 2.5%. that is off its highs of nearly 5% this morning. let's get a look at the commodity complex with dennis gartman. has the euro and/or oil both bottomed dennis? >> well it would appear that the crude oil market has probably bottomed. when i was on "fast money" earlier this week they asked me that question. i said you know it does look

like it has done exactly that. because the term structure, the manner in which the front months relative to the back months in crude oil had begun to change materially. forced me to say the bottom has probably been seen. i would hesitate saying the dollar has seen its best levels but the euro has seen its worst. but it doesn't appear crude oil has done that yet. >> i would say dollar and crude are related too. you're only willing to look at it one at a too im? >> yeah. i'm on willing to look at it one at a time. otherwise everything else being equal which is every economist's out, all things being equal a weak dollar begets stronger commodity prices. so yes, if crude oil has seen its lows the odds are better that the dollar has seen its highs. but i'm not quite willing to make that statement yet.

>> so pretend the s&p is a futures commodity. whatever. just pretend, analyze that as a commodities guy. has it been a near-term top or going back to new highs? >> no. i think we have some problems here. we may well have an interim top of some sort. i don't think bull market and stock prices has seen its best levels yet. still a bull market. but one has to be a bit more careful about being bullish at these levels. clearly there's problems. we've seen far too little leader on the upside. we've seen far too little participation. we've seen too much parabolic action in the biokek kalchemicals. that bothers me greatly. if we're seeing this sort of activity in the crude oil market this sort of rapid rise higher predicated on problems in the middle east where we have some really severe circumstances prevailing between sunnis and

shia, that sort of circumstance taking place doesn't make it more difficult to be bullish with stocks. it's probably time to be less bullish. it's probably time to be less involved. it's probably time to reduce one's expo shower ofsure of it. >> raising rates, get out of the stock market. or two, they're not raising it very much. there's nothing else to invest in around the world, stay in the stock market. that's what we're hearing today. it's either/or. i don't know. i guess some of both. >> well it has been a wonderful bull market and people have had a great deal of participation and a great deal of appreciation in their -- >> but now they're tightening. we know that. >> now the fed's probably going to tighten. they probably need to get it done. the comments earlier this morning from one of your guests would indicate that it's time to normalize rates. we're going to have to see the fed begin to tighten some time this summer. but they're going to make it

slow, laborious, but we have to have where people are given some sort of return. >> all right, dennis. see you later. thanks. >> okay. thanks. cheers. up next jim cramer from the new york stock exchange on the rise in oil. stick around. "squawk box" will be right back. you've got to make every second count. banking designed for the way you live your life. so you can welcome your family home... for the first time. chase. so you can.

let's get down to the new york stock exchange. jim cramer joins us now. how are you feeling about the market is this morning? >> we'll get oversold but i think that the money's going to gravitate back to the johnsons and johnsons before certainly goes back to the biotech or even some of the traditional techs, especially with sandisk blowup the money sloshed around in biotech. still got to be careful. i don't ever want to see oil up on this kind of move. i also think it's key to have the airlines retail restaurants remain leadership, and we'll lose them with oil up like this. >> the move with oil, because of the move into yemen -- the saudi arabia air strikes on yemen. >> these are -- look i think there's a lot of supply. i know there is demand level at 42, 43 i know a lot of people calming for $15 oil, suddenly saying go to 60. i'm more sanguine on oil it belongs between 40 and 55 but i

want to see on days like today go back to retailers, restaurants, domestics. if you any that gasoline's going to jump next week you're not going to be inclined to make that trade. >> what does sandisk tell us. >> this is horrible. the third preannouncement. analysts refuse to abandonment. the company could continue to execute poorly it's losing out a lot of share so samsung. yet analysts stand behind. today's the day, i can't take anymore. they'll be back tomorrow recommending it then can't stay away from this in qualcomm. my takeaway the analysts are stupid. >> all right. >> honestly. three times sandisk tells you we can't make the numbers. three times the street, 27 buys 1 sell. i don't know becky. >> fool me once shame on you. fol me three times -- >> this the worst. they lost samsung. they lost apple.

probably losing everybody. >> quickly, you said something about oil prices you don't like to see it move higher on this news. but basically saying you would like to see oil move higher than 42 on the demand picture, global demand? >> i would love to see europe come back online. that would be really important. china's growth is decelerateing. anything that shows europe is positive and brings oil up is terrific for the companies. the dollar stopped being strong but we still talk about how it's hurting earnings. any sign there's demand in europe is a good thing, not bad. >> the dollar's weaker but it's too late for first quarter earnings. >> people look through it the last few quarters people are willing to say this one's not that bad, so to speak. i don't want to give up on than there's a lot of hot money that came into the market last week semiconductors and biotech, that's got to find a new home. airlines don't go up on days like today where you have twin

negative. we lack leadership but guys will be coming back to j&js. >> a.p. andrew german security official new york indications that the co-pilot of the germanwings flight had any terrorist background no indications at this point. when we return arthur brooks on jobs in america. the top of the hour the latest on what was learned from the cockpit data recorder from the germanwings crash yesterday. back in a moment. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it track my crew's performance, and protect their heads? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪

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welcome back to "squawk box." the watch list at 10:30, nat gassen vener tos. march kansas city fed survey release at 11:00. after the bell earnings from game stop the cfo will join us tomorrow morning for a first on cnbc interview after the results. >> back to our guest host arthur brooks. at the very top, we'll end on this, we've talked about so many things but i feel divided, and i don't appreciate. i looked at this latest "the journal's" piece you don't base foreign policy on when you get mad at someone normally. this is a surreal world. the republicans are no better but -- >> look there's a possibility

republicans being better particularly foreign policy. look at foreign policy today. the foreign policy of the obama administration is not have foreign policy. foreign policy messy, difficult. >> you can't be really -- i don't know. you can't get that mad and upset. it's like business right? it's business. it can't be all personal about things like that. >> for sure. you can't be petulant and strike out because something's going on in one part of the world, you have to have a grand strategy. the grand strategy for foreign policy has to be we support without compromise democratic capitalism. that's what we support. we have allies like israel and taiwan and places that support -- >> i don't see how did that get fudged and we're not sure? iran, israel let me choose. when did that become an intellectual choice among people that -- i don't know civilized people. >> what is absolutely best in the next year for american

interests? no, what's best for world interest where the united states is a sole hyper power. we have to be a country based on morality. if we're not that internally, we're a crony capitalist place marginalizing bottom 20% of the income distribution hurting poor people. >> great to have you. tell us what you think next time. join us tomorrow. "squawk on the street" is next. 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 quintanilla has the day off. let's give you a look at futures. we've come back from the lows on the s&p and the nasdaq. you can see the dow jones as well which we also keep track of for you. we will have a lower open, after what was a poor day, if you were long in the markets, yesterday. crude oil, that is part of the