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 story, isn't it?

of course the increase in hostilities in various middle eastern countries, particularly saudis yemen, the u.s. now adding air power in tikrit. wti above $50 a barrel. maybe it's having an impact on the broader markets. here's the ten-year note yield. heard from lockhart he was with steve, saying soft soft in the economy. >> february was not a great month. >> no february wasn't. our road map, it does begin irk with the sell-off in the markets which is continuing. futures lower. you saw that oil up saudi arabia, yes, it is striking in yemen. sandisk is also under pressure this morning, after a tough day for semiconductor stocks. the company cuts its sales outlook and its stock is down as a result. and new, chilling details on that plane crash in the french alps. officials saying the co-pilot deliberately downed the plane. more details as they emerge.

a news conference from lufthansa in the next half hour. oil prices surging past the $50 mark. you saw that. that's the first time since march 10th, after saudi arabia and its allies launched air strikes on yemen. that news weighing on futures, one day after a sell-off which saws the s&p fall nearly 1.5%. the du'sow's down almost 300 point. nasdaq down almost 2.4%. biotech stocks, we talked here yesterday, talk about a bubble in some of them, jim, were amongst the biggest losers, that pressured the nasdaq. >> last friday was a peak in biotech. we had the same peak last year. this time secondaries, kind of a notion that there's just so much data and every data's rewarded with a higher price, that was too frothy. froth's coming out of biotech very fast regeneron loses 40

points. is his spear on they're tough to look at they look at a pure parabolic blow-off. it just does not bottom quickly. the difficulty is to find leadership. if gasoline and oil are going up will you lose retail restaurant? it's conceivable. you can lose airlines. there is negative semiconductor news, and biotech is weighing on so where do people go? and that's why did the futures rally? i think it's arguably people are going back to the j&j syndrome back to bristol-myers. i just -- we're lacking leadership. the reason we don't go down as hard, yesterday was a very very horrible day. and a lot of the research today is reflecting other than sandisk, what happened yesterday. >> those also saying we shouldn't have been up so much last week. >> right. >> the s&p basically hit its level from the 18th yesterday, so really why were we up last week and now just returning to

levels we should have been at because the reaction to the news last week was bizarre. >> we were so happy. the oh the fed, the fed, terrific. great -- >> "patience" is gone but we're good. >> we need to see better earnings. last night we saw good numbers from accenture, red hat, two core technology names. the problem is sandisk is the name that wall street has defended over and over again. this is a commodity company that is now had three straight misses, and all analysts ever do is apologize for it. i think the release this morning will make it difficult. they're finally having analysts breaking ranks. don't forget what happened to sandisk. the key to semiconductor land is, are you in apple? but apple doesn't let people say we're in go ahead, talk about how great apple is. they don't like any of the suppliers to talk about apple. but apple is buying flash chips from samsung and samsung, though its apple's nemesis, and that

united states sandisk's business lost. we can say that's the tail. taiwan semi yesterday in a conference in europe said the inventory inventory's too high, goldman pointed out unnoticed comments. maybe they'll reuse equipment, that is percolating. so those are things that hurt semis. >> the news with sandisk of course cut revenue guidance for quarter, cited weak enterprise sales, withdrew the forecast for other periods. the stock is going to be down what are we talking about now? >> even after they preannounced for the second time analysts said ignore them the man behind the curtain, everything's fine. the man behind the curtain is second-rate. this is a commodity play on flash. you can't be in flash, traditional pc semiconductors either. you can't be in microsoft, i've been saying that for some time. intel's coming down to levels

where soon but the desktop is terrible. the desktop is terrible. the mobile speed of adoption is just insane right now. >> right. >> it's literally each day more people decide this is not the way to go. hewlett-packard has dandy models tested them doesn't matter, david. david, this is a triceratops. >> there is a need for that. i mean we've got a bunch of them in front of us don't we? they always point out, every story talking about the death of the pc is written on a pc. >> here's the problem, it's always going to be the marginal growth rate all right? and the adoption. and these are not as good for facebook as cell phone. >> no doubt, no doubt. anticipating there will be growth in the market is hard to imagine. >> the actual units down is what -- this is like what happened with kraft. you didn't want to own kraft everybody the switch total gears, you dent want to own

kraft because kraft didn't have growth. warren buffett says you'll never replace philly cream cheese. you'll never replace pcs. but tech is made up of growth investors not made up of people who like units. michael dell -- >> part of tech are made up of that. hp splitting into two, one which they believe will be a higher growth, and that's not the one including pcs. that's structured as a dividend play or return of capital play than the other part of the company, they hope will be growing faster, but remains to be scene. >> technology's buffeted by the strong dollar. that is going to hurt the translation. 40%, 50% of technology's earnings come from europe. there's a lot of headwinds for technology. frankly, i think that if you get away from the actual core pc like if you look at red hat's numbers or accenture's numbers you realize there's a lot of technology spending going on.

it's just not in traditional waves. >> right. i mean granted, the -- we have -- we're fairly penetrated when it comes to mobile as well in terms of devices, jim. >> 2 billion talking about. >> right. around the world. when you talk to the likes of for example, qualcomm, they'll say so much more to go. you get into the idea of the internet of things. >> that's what i'm focused on. >> so many talk about, whether it's qualcomm or yesterday charlie ergen and dish all of the spectrum. i know everything's going to be connected. so many more devices than just what you're holding in your hand. >> david aldrich on "mad money" talking about 70 billion connected devices by 2020. that's a great secular growth story. social mobile cloud connectivity, the big four. talk to me thank you, by marc benioff. >> no but ibm likes to talk about the same four as well. >> but they're only 29 30%. ibm is trying hard. it was interesting warren

buffett when asked about ibm said i'm not going to talk about stocks we're buying or selling. i don't think he's a seller. i -- that didn't sound like i'm buying a lot of it. >> no, but was what we know he bought more as opposed to -- >> right. >> we had the investor day from the company. >> put on our happy hats on pmi. >> let's put them on. >> nice percentage of the company that's doing well. >> it's growing, yes. >> if you can get that to be a bigger percentage without the pie shrinking. >> that's a key. >> nice storiy. >> how do you make the story moving down the track. >> kraft managed to remake it with heinz. they think that velveeta is fresh as a daisy. >> yes. you and i are ready. our shelter -- yesterday i took your advice stocking up. >> the expiration date on velveeta, i said check the label but i think it's got like a 37-year shelf life. >> that is all. >> i know. i'm raising my shelf life here

right now, like an analyst. >> to 45 years. >> 45 years shelf develop veet tapvelveeta velveeta. that stuff keeps. why don't you have to refrigerate a dairy product? don't you refrigerate most dairy products at home. >> yes. >> isn't that quiz zi cal. >> you know the answer. >> warren buffett liked it for 30 years. he drinks cherry coke. i'm not allowed to drink that. >> any dareiry in velveeta. >> there is. i googled it. there's a percentage of dairy. >> somber news. new developments surrounding the plane crash in the french alps. let's collect in with phil lebeau. >> new details coming out of france from the prosecutor in marseilles describing what they found, what they heard on the cockpit voice recorder. according to the prosecutor, this is where things stand at this point. they believe that this plane was

deliberately flown into the mountains by the co-pilot alone in the cockpit. no communications from the co-pilot at all. they can hear him breathing. he says according to the prosecutor this was normal breathing. it wasn't as though he passed out or there appeared be to some kind of struggle sounded like normal breathing, according to the prosecutor. and you could, at the end of the cockpit voice recorder, you could hear shouts from the main cabin, clearly as passengers there realized they're going to be crashing into a mountain. they see the captain on the outside banging on the cockpit door trying to get back into the cockpit and all of this now leads to questions, who's the co-pilot? what were his motivations in the final ten minutes of the flight? his name andreas lubitz he's a german citizen, 28 years old, 630 hours of flying time joined lufthansa just within the last year and a half. and speaking of lufthansa, the ceo of lufthansa will be holding a press conference oh 15 20

minutes in germany. at that time there will no doubt about be questions about andreas lubitz, his background what kind of checks they did into his life and what's going on. but clearly, guys this investigation has shifted from a routine civil aviation investigation, where you look into whether it's a mechanical failure, et cetera and now it is clearly moving towards a criminal investigation into why this co-pilot deliberately flew this plane into the mountains. back to you. >> yeah. >> thank you. frightening. >> i mean -- when i was a reporter i covered several plane crashes and you know this one, obviously 9/11 is like none other, but this one is reminiscent of plane crashes i once covered in l.a. where it -- they all knew. they all knew. it was unavoidable because they knew. i just listened to this i don't know why this one just got me

bad. >> yeah. >> it done help us to our viewers to hear that it got me. i'm a stock guy. but i think it's -- the reason i -- sometimes when you have news pick up the paper, it's yemen and it's this and you say, okay sell. that's not necessarily rational. but remember that a lot of people are -- react to momentary gloom in an environment where they bought stocks at a high last week. i'm talking about the market psyche. which i typically don't do but worth pointing out. >> understood. we'll talk lululemon and pvh. >> a good quarter but no one believes me. >> break down the earnings and guidance. it's a tale of two stocks. >> you didn't want to go -- >> i'm not going to kens ing toing to ken seeian. >> i had to go back and study my kane. another look at futures. well off the low of the morning.

more squawk on the street from post 9 after this.

lululemon exceeding street estimates with the holiday quarter results. also forecasted weaker than expected profits for the current quarter. and that did have the stock down although it seems to be bouncing. the call's going on. we'll try to get you exactly what's being said.

pvh beat on the earnings line but did miss on the top line so-called revenue, in the fourth quarter. full year guidance below consensus due to the stronger dollar. jim and pvh's ceo discussed the impact of currency and the strong dollar last night on "mad money." >> some companies, they say, look, every time it lifts we try to hedge a little bit, i don't know when some currencies will come back between now and a year from now. >> jim i don't think our job is to start betting currencies. i've been doing this now for ten years. and up until four months ago if we would have been betting we would have been losing every month as the dollar weakened. we try to take a balanced approach where we buy goods in international markets in u.s. dollars, we go out as far as a year to really tie that in. but we don't try to bet, if the euro's going up or down or don't try to bet if the ruble is going up or down or the brazilian

real. >> all right. you know you were critical yesterday. >> because -- >> now that -- >> not returning capital in the way i'd like but that could happen. manny said that later in the year. the currency basket which he disclosed, it's not just the euro. russia down 40%. they decided to move away from the united states aggressively move overseas with tommy hilfigure and calvin klein. they have some legacy business shirt business not doing well. what's important here when a stock's down whether lululemon or pvh, they're anticipating big misses. you did not get big misses on either one. you got a small-term beat them pvh and a big beat on lululemon. they're not going to say positive things going forward. there could -- that's going on now. you and i talk about we're out here it's like i am getting conference call sporadically. remember these companies down a

lot versus a sonic that was up a lot, they tend to react better if they've been crushed ahead. >> yep. >> and you know red hat's been down the last four five days and they reported software as a service, you often hear them in conjunction with sales force. they had a very good quarter. accenture worried about it. stay focused. if the stock's down ahead of time, it's spry if he report decent numbers. >> lulu well off the lows pvh -- >> shorts have to come back and defend their negative position, which was everywhere immediately. this is 2016 story, david, because the broader trends, whether you hear it from deckers, whether you hear it from the under armour people is yoga is a pervasive, secular trend. and lululemon is synonymous with yoga. is leadership as strong? that's not clear. i think the product has made a comeback.

i think the people who decide that this is a company, not one to own, should recognize nike would like to be in the space very badly and not able to develop a product i find anywhere near it. >> less than a month -- you know what? we'll have your "mad dash" next. we're running through the minutes so quickly. >> you were going somewhere less than a month. can we continue that? >> yeah. >> i'll be ready. >> plad"mad dash" next. another look at futures. we were down a lot further, about a half hour ago. we've turned considerably. but still in the red. we've got more "squawk on the street" after this. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

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seven minutes before the opening bell. that's an eternity here on "squawk on the street." >> sure it is. glad you mentioned it. >> let's get to conagra. lower sales, a loss for the quarter. >> if you back out that business, the private -- the private label business that they paid too much for, there's a little bit of a belief that maybe the worst is over for this particular package good company. remember, they do not have the products that people really want. and this is the warren buffett issue, too. the processed food pantry food we can joke all we want about it but a whole foods, trader joe's, even the fred meyer, they have a kroger, they're not crazy about this kind of stuff. >> the segment of the population, i would point out, still eats a lot of this. a lot. >> that segment's getting older. >> maybe getting older. also have -- may also be the high higher-end that can afford it. >> i grew up chef boyardee and

tang. >> if you gave me chef boyardee right now i'd be happy. that was my dinner in my 20s. come home open it up. >> there's no accounting for taste. >> then get into the chips ahoy. great meal. >> don't go there. cowan, switching gears entirely to the rails. the rails have been a leadership group, david. cowan downgrades union pacific. ksu, kansas southern reported this week, negative numbers, that was the peso they do a lose of business in mexico brings autos and also have oil that comes all the way down. union pacific has fracking sand. people are forgetting that fracking sand is down huge okay? they have a lot of metals that are shipped by train. those are bad. this stock needs to stop its decline before we can really get this thing going because you've got the airlines coming down. i'm worried about march traffic. gasoline going higher. and you're losing the rails. i saw a number trim for norfolk

southern, this is also coal. the coal industry sold to you, going away. the iron ore industry sold to you, going away. these are things that led the bull market in 2008. iron ore and coal and fertilizer, that bull market predicated -- also copper -- history. history. >> cliff's natural. >> how is that doing? that stock has come down from 2008. >> yes, it has. yes, it has. what is it -- i don't -- actually the airlines, you made a quick comment about march traffic, why? >> i'm worried about the strong dollar. i'm still worried we will see the impact of travel because we're starting to realize, people think it's too expensive to come here. this is starting to impact their strategy. >> what about us going there? >> i saw us -- >> that's a good thing. >> look i'm itching to buy airlines. airlines are very loesw

price-to-earnings data. all airlines are not equal anymore. >> we'll have the opening bell. >> here to eternity. >> from here to ecertainternity. >> or lancaster, on the beach. >> frank sinatra's big comeback move. >> four minutes until the opening bell. also awaiting the lufthansa news conference. it will begin a few minutes from now. it's going to be in german but of course we'll bring you details as we get them on that flight. we're back after this.

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yes, we are "squawk on the street," live from the financial capital of the world. we've got the opening bell to ring in less than a minute from now. i love two of us together i like to bring back the '90s, of course when i used to ask you, what's the key to the market? >> right. >> you would answer pfizer. >> celgene. >> really? >> everything's terrific with celgene. that stock's been going down. the reason that's important, it's not a fly by night biotech it's a biotech with good earning stream. if that doesn't stop you're going to be in trouble because biotech's the leadership group. >> shouldn't it cause at least

refreshment, 70 to 130 in less than a year. >> you asked for the key to the market, david. that's the delta, that's the marginal one that you asked me for. you didn't ask me for bristol-myers. >> no, i didn't. i got my answer. there is the opening bell. back to the real-time exchange headquarters. here at the big board, franklin financial networks celebrates its initial public offering today. and over at the nasdaq solar edge technologies also celebrating an ipo. two ipos. >> very strong first solar strong, the idea they can spin off a business has a yield co. >> yes. >> you think with oil down the stock would be decimated but they're not. the overall drive, this is for conservation, it doesn't matter where oil is. that group is not as weak as you would think. some say that tesla is weakened because of gasoline coming down. tesla has a woel sethole set of other issues. i mention that because of

bashers, i say that, people say you hate tesla. i say i love the car. doesn't have anything to do with the stock. i love the car. >> consistent in that. i would point out, of course sales in china, talking tesla -- >> they could double. the sales could double. because they had, what sold ten cars in january. they could double. >> they did. >> a lot of people in china. don't you -- >> you knew that. ten in january. china imported 63 unit of the model-s in february. >> it could be 126. >> shares in tesla, 4,761 units in 2014 to china. >> that's a decline. >> averaging 529 units a month. >> that's a decline, what you're telling me. >> yes. >> look we can explain that away. if you give me maybe four five hours, give plea that "squawk alley," i cut into wapner's time. >> you'll have that figured out. >> like sandisk. i'm trying to explain away sandisk right now. >> let's take a look at sandisk shares. the facts get in the way of

this. it drives me nuts when the facts get in the way of an explain away. >> when the facts change i know the quote. >> keynesian. >> sandisk down 16%. >> what do you make of that. >> i want to ask -- is that an appropriate response. >> yes. the company's say, guys give up on us already. i mean honestly they have the wrong -- they have the wrong semis, their flash, the wrong iteration, the wrong customer base. it's not happening for them right now. let's just let them kind of sort -- let's give them a time-out, david. you know how you give the kids a time-out? >> yes. >> give them a time-out. >> how long should the time-out last? >> how about two quarters? that's what it takes when you have three misses in a row. you've got to see one quarter, maybe quiet things down it's enough. watch biotech for a bounce. that's what has to bounce not

the spec taulative bioteches. >> the big guys. >> biogem went up. >> so many of the stocks have gone up a great deal. we come back to multiples and they're a varied bunch. gilead trades at 14 times. >> gilead very inexpensive. >> celgene multiples closer to 20. >> you know what? i'm going to revise everything right here right now. >> okay. >> the other one to watch, what is the drug company that has the most momentum, that is loved the most in the country, that is revered, thought to be like perhaps the greatest narrative of all time the $25 -- >> actavis. i got it. >> how do you -- you why a "jeopardy!" champion. >> i got it. i was nervous. so that's -- >> make it happen. >> around 300. >> if actavis turns around and celgene turn around, it's going to be a bit of a nice day. >> let's talk mcdonald's for a second. easterbrook is here somewhere,

at the nyc. i believe an investor meeting today. >> double cheese burger? >> i would assume. >> everybody has to have one. i went to phillipip morris there was a pack of marlboro lights when i went there. >> i remember in the '90s where reporters came he was sitting in front smoking like crazy, he sent a question to general counsel. we're all in the room looking at him we turn around. and the general counsel's like he's smoking away. >> got to love the "mad men" aspect. this is when there's no good. bloomberg hadn't changed the rules. >> you could still smoke in office buildings then. >> easterbrook is embracing the concept. >> he's saying we are what we are, embrace it. >> yes, we are what we said we are, a variation of a great nfl speech. >> that being said you have pointed out many times, i have

as well, in the investors i speak to who are owners but want to see cost structure come down -- >> larry robinson. >> one of them. >> because it is bloated. they've got to get the franchisees back. otherwise franchisees gravitate to other brands rather be part of the burger king chain. >> then you get to 3g which moved in there. and how economically they run things in terms of a per franchise, number is far lower than it mcdonald's which brings me to kraft. yesterday -- >> i said it was going to up 25. >> you did. >> you said jim, up 25. >> i e-mailed you when it hit 87. it's 83 today. flat on the day. >> because of 3g. it's not because people are going to start eating jell-o again. listen my name is o-s-c-a-r. no, people like protein, particularly china, a lot of places love protein, that's why

hillshire brands -- you have brands that can be resuscitated and you fire people. 3g doesn't have that allegiance. these companies are known as companies with a lot of -- gone. >> "the journal" writing a long story about zero base approach which we talked about a great deal yesterday. >> yes. >> they do every single year at 3g, figure out what do you need to run your business? starting from scratch. >> look, obviously buffett's teamed up with great operators. you can take brands that are doughty, you can buy a company like a hanes that will reinvent your product line. a lot to do to generate a lot more cash. >> we've got the s&p down about .4% right now. let's shift gears and get to that news conference that lufthansa is holding. of course, we'll get more details on that. let's head to phil lebeau, i believe, who is listening in. phil? >> and, david, let's stay with this shot here. that is the ceo of lufthansa

speaking in cologne, germany. he is the ceo, just begun his comments. so far what he has said is clearly what has happened with germanwings and this crash is a tragic turn of events. the question that is clearly going to come up is how did this pilot, what were his motivations, the co-pilot according to the french prosecutor deliberately flew the plane into the french alps. carson said we are careful in selection of pilots. that's all he had says regarding the selection process for pilots, for both lufthansa as well as its subsidiary germanwings. that press conference is going on guys right now. to bring people up to speed regarding the co-pilot who was the only person in the cockpit, as this plane went from 38,000 feet into the french alps at 6500 feet his name andreas lubitz, 28 years old, a german

citizen, has been with lufthansa's germanwings division since 2013 had 630 hours of flying time in the a-320. according to the french prosecutors, alone in the cockpit. you could hear air traffic control, the captain on the outside of the other side of the cockpit door banging on it asking him to open up the door. you can hear all of that on the cockpit voice recorder but all you hear is regular, normal breathing from andreas lubitz. that's the latest on the investigation, guys. we'll keep listening to the press conference. we will bring you updates, depending on what carson has to say. >> thank you very much, phil lebeau. of course, the story that we'll be following throughout the morning. you can see the press conference continuing. the market here, jim, well off the lows at least it looked to be the case when futures began trading this morning. but we're still down. >> yeah.

>> oil is of course up. flips 50 bucks a barrel on wti. you -- yemen is not an oil producer but simply the idea of more unrest what that might mean. >> that means money gravitates to kraft, conagra. you've got to see union pacifics, they have to stop going down. you have to see not too much money going into oils because we don't -- that could be temporary. you've love to see banks go higher but interest rates are down, so that's 17% of the s&p is finance. looking for leadership is what i'm saying. we don't yet have leadership. i don't mind the tone here simply because leadership will emerge from kimberly proctor, andsome of those because the dollar's been weaker for three weeks. >> that is a good point. one we haven't mentioned. the dollar's come down. it's still up 20%, the dollar index. >> people like to go to what's safe. they go merck with the buyback. they look at pfizer they're going to circle back to warren buffett-like names.

so it's not the end of the world. it's just kind of an okay tape. i still don't want to go -- if we see -- i'm going to reiterate, if we see celgene go higher -- >> the key to the market is celgene and it is up. >> there we go. lululemon, by the way, my people on the conference call they say west coast ports and weather, that's why the stock's knocked down four. >> west coast ports, sure of course that is lululemon. >> up 2%. >> bob pisani on what is moving. >> the close that we hit a few hours ago on the futures, we started down and moved even off of the lows from the start. let's put the s&p 500 up. we'll keep up the press conference. we're well off of that. it's interesting, energy is the leader here not surprise with oil stocks on the upside. tech is weak thanks to sandisk. health care industrials also a bit weak. but not that dramatically. there's also issues for stocks

we've talked about the negative earnings growth. q1 being negative. and q2 have been negative. this is the fact for the last couple of weeks that continues. we're down -- estimates down 2.5% for the s&p 500 for the first quarter, comparatively high valuations another issue. timing of the fed's interest rate hike. we've got a big problem here. negative earnings growth with the potential of fed hike down the road that's a major problem in terms of a combination for stocks to move again. the dollar reversed a bit. that's why -- created a rise in commodities recently. that's a little bit of good news copper come off of its lows. gold has come off of its lows in the last week. to add, we have geopolitical risk of what's going on in saudi arabia. that's hard to quantify except you see it in oil moving. those geopolitical risks seem to be affecting europe more. germany, france spain, all down more than 1%. lufthansa, i should note down

4% trades over in germany, not here. the airlines here in the u.s. are also generally on the weak side p side. american airlines, united also on downside. teches are weak on the sandisk announcement. sandisk gets most of its revenues outside the united states. they get a third in china. so i'm surprised, reading the report, they didn't say anything about currency weak's. all they talked about was lower sales and lower prices. now that might be a side effect of the currency weakness but they didn't specifically cite currency weakness. micron's weak amsl. taiwan semiconductor already preannounced, that's down a bit. intel also preannounced, that's down a little bit. entire tech complex is on the weak side. right now, s&p pa500 earnings estimate down 3% for the quarter. probably hit that today. off of the recent highs like semiconductor stocks well off the recent highs, and of course

biotech stocks as well. a lot of discussion about the ibb, biotech index. even that one, which got hit pretty hard isn't near the 10% level. now down more than 1%. that would be an 8% decline from the historic high. so the biotech index, ibb, hit an historic high on monday and a lot of people very concerned that now we're in a double territory. but we're only 7% or 8% off of that historic high. so right now, the market fairly stable. we came in close to down 100 on the dow. right now down 70 points. energy the sector that's in the lead. david, back to you. >> thank you, bob pisani. from stocks to bonds. we go to rick santelli at the cme grew in chicago. >> thanks david. two-day chart of tens tells you a lot of information. you see that low yield on the left side of the chart, 1.86. hugely important. and we continue to see the impact of that as rates start to melt up a bit. granted, that there are issues stock market's basically down on the year at least in terms of

the s&p and the dow. and interest rates are climbing a bit. does that make sense? it makes sense when you stand back and look where we are year-to-date on the fixed income curve. we settled at 2.16, 2.17 lastier on a ten. down over 20 basis points. the delinking may be not only the end of the quarter in the u.s., end of the fiscal year in japan. let's open the chart up to march 2013. you can see, should we over time, chip away at 1.86 area below us in tens or 1.35 in 5s? there are spikes that give you an idea. low 1.60s. that's the low yield for 2015 thus far. everything has a new trend. month-to-date, tens minus twos flattening again. flattening does get associated with lower rates. look at the march 1st of 2015 starts, same thing for bunds. you can see, moving down although the ranges are getting

tight. now do the opposite. let's take a long view of the euro versus the dollar going back to last time we saw levels before they started to rally, january of '03. you can see, that chart's a hard chart to defend to buy. month-to-date, completely different look. the dax, same dynamic, the dakotas moving up. month-to-date, it can do a bit of correctingen those are similar charts to our stock market. if you look at dollar/yen in the same context, yes the dollar's improving against the majors. but month-to-date look like this 1.19 level can take the zing out of the dollar trade. back to you. >> thanks very much rick santelli. let's get a closer look at move up in oil prices. we go to jackie deangelis. >> good morning to you. we saw an intraday high on oil today, 52.48, backing off a little bit, $50.63 at this point. of course the conflict in the middle east right now is first and foremost for traders here

that's on the radar. the issue is that they're looking at the global market here. this was sort of the wild card that nobody was expecting for oil prices. we were looking at supply and demand we were look agent the dollar. this sort of came out of the blue. remember, here in the united states, we still import a significant amount of oil between 8 million and 9 million barrels a day. we do care what happens in the middle east, despite the fact that production is ramping up. remember, the reason saudi arabia air striking on yemen is because of what's believed to be a group of shia-backed iranian-backed militant there's, rebels, that are trying to take control. saudi arabia does not want this in its backyard and that createsen stability within the region. remember in terms of production what happens coming out of libya, iraq also unstable. so this is why we're seeing prices rise. the brent price right now 1.47 57.96. what traders are watching. the dollar dropping a little bit is supportive of crude prices as

well more for you on this as the story develops. nat gas inventories not a sexy story but a good trade right now. we'll have that at 10:30. >> jackie deangelis. news this morning that learn vest is being acquired by northwest earn mutual. the ceo will join us later on. say you're a finance guy. a farmer. a researcher. you used to depend on experience. the internet. your gut. today you can use ibm watson analytics.

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the street." back to phil lebeau, an update from that lufthansa press conference. phil? >> that press conference is still going on the ceo of lufthansa answering questions regarding andreas lubitz the 28-year-old german pilot for lufthansa, actually for germanwings, had been with the company since 2013 who according to the french prosecutors, deliberately flew

the germanwings plane into the mountains, into the french alps just a few seconds ago there was a question about why it is not required as it is here in the united states and elsewhere, that when one of the two people in the cockpit get up to use the facilities, to leave the cockpit, that a flight attendant then goes in and stands in there with the remaining person in the cockpit, that is not required in germany. and the ceo said look that's not been a requirement here. clearly, that's going to be addressed with and reviewed in the future. but that question has been coming up today. it's a requirement here in the u.s., and it's required elsewhere in the world. it's not requirement at all times on german flights. we'll keep listening to this. again, the focus now is on andreas lubitz, what were his motivations for deliberately flying the plane into the mountains, according to french prosecutors. >> one imagines that policy may be changed in germany. always tough to toggle back and forth between the market and a tragedy like that.

but that's what we've got to do. i want to come to twitter, jim, because the stock's up sharply. sharply may be an overstatement. up over 2%. >> "the journal" story saying twitter, display ads, an outfit started with a buy. twitter, david, when you read articles about the upfronts and read that money's going into digital. >> yes. >> you can't just think facebook. twitter's getting a nice chunk i'm continue to think that twitter, owned by my charitable trust,s a major profit generator. >> back above $50. the stock's up 40 plus percent. >> the quarter was good. it was the anti-tesla quarter. i love tesla car, by the way. it was a magnificent quarter. a lot of people felt what happened, they heard the drum beat that you've got to start making money, not unlike the facebook conference call one of the callsing that was breathtaking. >> which one? the one way back or recently? >> we had not done mobile we'll do mobile.

nobody thought we could. and the google conference call they said guys we care about our stock price, which was rev lary latory at the time. >> and ruth porat. the question for google and her how empowered she is whether she's going to act on cutting back key initiatives ala, five, something charlie ergen and i did not discuss yesterday. >> i joke about google skunk works, they've come up with a great company. i hope she says we have youtube we'll monetize youtube. i hope she's doing forward thinking. not what anthony noda said. these guys are moneymakers. >> talking about making money, "stop trading" next.e power ofctive management. our teams collaborate around the world, which leads to better decisions for our clients. put our global active management expertise to work for you. mfs. there is no expertise without collaboration.

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the bill protected by owners who don't want to service lesbians gays transsexuals. don't forget salesforce.com bought exact target for 2.5 billion. the people which he promised to keep there, perhaps they have to move. something, a developing story. doesn't impact salesforce.com's earnings. i thought it was important to point out it's a tweet, how important twitter is to get out. don't forget actavis, ibm. >> celgene. "mad money." >> we have the key did the second half of the day, sky works solution the most powerful semiconductor in the country right now because they have almost every cell phone. stock down badly from 121152-week high. super marks, i have to follow the industry. lot on reits. more on "mad." see you tomorrow morning.

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good morning. welcome back to "squawk on the street." i'm sara eisen with david faber and kayla tausche, live at post 9 at the new york stock exchange. carl and simon both off. down day with the dow down over 80 points. earnings in focus, obviously. also watching oil, increased violence in the middle east. wti crude is up more than 2%. let's get to our road map for the morning. twitter launching its own competitor to mere cat, but will periscope measure up? we'll give it a test. oil prices bouncing back west texas crude, up more than 8% since just monday. but are gains only temporary. the one and only art cashin navigates the big market moves. let's start with the market across the board. u.s. stocks tumble a fourth da in a row. oil prices surging after saudi

air strikes if yemen, with wti past $50 a barrel again. joining us chad morganlander and scott brown, chief economist at raymond james, to talk about the soft data in the u.s. a number of worries now. talking earnings and guidance coming in below expectations. it doesn't help to have geopolitical concerns back at the front end. >> it's convergence as well as valuation of the s&p 500 everybody and the broader marks are topee. looking at forward-looking estimate on p/e multiple of 17 times. global groetwth that is decelerating and in the united states, where are we rooking for q1 1.5% at best. >> bioteches have been hammered. led the market up now back down if term chz thes of the year's gains. nasdaq haddite worst day in almost a year. >> the theme for 2015 will be this move from the high momentum

stocks, which have benefited from the wave of liquidity, courtesy of the federal reserve to low moanwmentum stocks. you want to reduce your risk in the equity markets as all other risk marks and be pragmatic about the allocation for the time being. >> yes, we might have seen the ibb, fall nearly 5% yesterday. but it's still up about 12.5% so far this year. while other asset classes have obviously been either flat or retreating. i'm wondering where you see growth, now first quarter profits for corporations are coming down. >> well i think the profit story is very important. a lot of that has to do with stronger dollar, although we've seen a pullback in the dollar more recently. the corporate profits cash flows, that's a big driver of capital spending. look at orders and shipment

numbers, not just yesterday but the trend over the last several months, you know it's really relatively soft. consumer spending that accounts for 70% of the economy. and that is looking relatively weak, if you look at retail sales numbers. we do expect growth to pick up particularly for consumer spending, in march, april. that's really going to tell the tale. that's typically when people start spending more. it's hard to make a lot of heads or tails about the numbers for january and february. you've got a lot of winter effects, a lot of bad weather. but this is really you know a period of heightened uncertainty in the economic outlook. you've seen a lot of the gdp forecasts coming down and down, some as close to zero, if not negative, that's a bit of a concern. expecting consumer spending in particular to pick up in the spring and summer and that should help drive the overall economy. >> i wonder how much is driven by the uncertainty factor around

the federal reserve. the fact that they are no longer giving explicit targets for unemployment and forward guidance. uncertainty when the first rate hike will come and what's going to look like after that. >> if the first rate hike is september, october, june it doesn't matter. i think the market is looking at 2016 and when they're going to start with systemic rate hikes. we don't believe that to be the case for '16 or '17. inflation expectations we believe around 1.5% for 2015 at best. again, yes, we are at full employment, but wage growth is lackluster. >> when you think about data across the board, it hasn't been good durables yesterday were really nasty. far worse than people expected that led the industrials down quite a bit because people were saying, wait a second those is the fifth or sixth month in a row business orders have been soft. on the other hand jobless

claims today, five-week high market services index, at its best level since september. do you see any evidence that data might be starting to turn around? >> it is an uneven growth rate at this point. we do see in the united states the employment trends are become labor slack is tightening that bodes well. when it comes to capital spending like your guest has mentioned, it's been lackluster. 16.5% of gdp is capital spending. normally that's around 19%. so, we have to really see a real huge get up and go within capital spending as well as just overall global economy. the eurozone, for example where are we are looking there? growth there, 1% at best for 2015. >> yeah. >> you look to china, decelerating growth gdp growth there, around 6.5% far worse than expectations are. >> let me just quickly wrap this up with you. in terms of consumer spending

many would have thought it would have been stronger already. you're assuming it gets stronger. we've had low gasoline prices for a bit of time. we have a lot of job growth why haven't we seen it previously? what makes you think we will? scott? >> i'm sorry. didn't catch the cue there. well you know again, it's hard to make heads or tails of the numbers that we're going to get in january and february. this is largely a transitional period for most retailers. you're going from the holiday shopping period and you're not quite yet into the spring easter sales period. so i don't think we should be too surprised to see a little bit of softness in the retail sales numbers. we know the impact of lower gasoline prices is going to arrive with a lag for the consumer. and so we expect really to see a pick up in spending. we're getting some accounts in florida reporting people are more likely to be driving down here taking vacations. so that's going to be very helpful in the next several months.

>> guys, i've got to leave it there. thanks to you both. >> dow down 100 points at the lows. >> let's get now back to updates on the tragic plane crash, of course, in the french alps. a lot of new details today. phil lebeau's following them for us. we go to him again. phil? >> david, we're monitoring a press conference. this is the ceo of lufthansa, carston spohr, they just wrapped up that press conference a few seconds ago. final question being, did you talk to the families and do they know, did you tell them personally that this in fact was a case of your pilot, one of your pilots deliberately flying this plane into the mountains? he said he met with the families yesterday before they knew everything that was on the cockpit voice recorder. he was fairly emotional during the press conference. the co-pilot who was alone in the cockpit as this accident took place. basically, blocked his captain, the other pilot, from coming

back into the cockpit. the co-pilot, andreas lubitz 28, 630 hours of flying time relatively new to the lufthansa family. in fact, he joined germanwings as a pilot in 2013. here's what the ceo had to say about the selection of pilots by lufthansa. >> translator: we have full trust in our pilots myself and my colleagues. they are and will to be the best of the world. this is certainly what we've done partly in lufthansa, they are an integral part of our brand and what has happened here is a tragedy, individual case and event. >> by the way, carston spohr said that andreas lubitz passed all of their tests in order to be selected as a pilot by lufthansa. this is a scene in the french

alps as they continue to do the process of not only investigating and looking for the flight data recorder but clearly the recovery of the 150 people who were victims in this plane crash. the question that has come up guys repeatedly, is what are the procedures in germany for a pilot leaving the cockpit, because here in the united states, and elsewhere around the world, the procedure is if one of the two crew members has to get up and use the facilities a flight attendant then goes into the cockpit. so that you never leave one pilot alone in the cockpit. that is not the rule in germany and that question has come up repeatedly. the ceo talked about it. he said perhaps that rule will be changed after this accident. but that question has been coming up, guys and clearly, this investigation is now focused on the co-pilot and why he deliberately flew this plane into the mountains. >> phil thanks for clarifying. that is a big question. the other big question here is how does a pilot, a senior

pilot, get locked out of a cockpit as we understand it there was some access code that can be blocked from inside the cockpit. >> there's an override switch. ultimately, if you do not want to let somebody into that cockpit, you can keep them out. there's an override switch. there's a keypad on the outside, the captain knew the code the flight attendants know the code but that code doesn't do you any good if it's being overridden on the inside by the co-pilot and that's what happened in this case. now there's going to be debate. does that rule need to be changed, procedures need to be changed? clearly that question will come up now that people are looking at security of the cockpit following this accident. >> so phil what are some of the tests that a pilot would have to clear to be determined to be fit at age 28 with limited flying experience to fly with a relatively senior pilot but a fairly big plane with a lot of passengers? >> i have to be honest with you, i don't know the specific tests

that lufthansa puts its pilots through. but clearly, you're talking about an airline here that has thousands of pilots. so there are constantly in the process of recruiting pilots from training schools around the world. this was a good morningen citizen, andreas lubitz is from germany, we don't know the background other than the fact that he was certified and passed all of their tests in order to become a pilot. >> phil lebeau, we appreciate you bringing us the latest on this story. we'll get more from you later. for more on this let's bring in a former ntsb investigator. john we appreciate you joining us on the cnbc news line this morning. we're getting some more answers on this situation, but obviously more questions as well. among those, how you can actually get locked out of a cockpit. and i'm wondering what at this point to you in the situation, still remains a mystery. >> well this revelation this morning clears up a lot of mysteries in my mind because

there was just -- just didn't seem possible there would be a mechanical failure that would let the airplane do what it did. so it's a nagging question about intervention, has myself and other investigators. now we know the focus can change, the areas of the operation, your previous guest was correct, if someone in the cockpit wants to keep you out, they can keep you out. even though you may enter the correct code and the keypad some of the late airplanes use voice transmission they have the ability in the cockpit to overrule that and just keep the door locked. when you're hit the code there's a warning in the cockpit that somebody's trying to get in. one of the pilots just reaches down and hits the switch and denies access. >> so it has to be john a

manual override there's no scenario where someone would be trying to get in and the code would malfunction, the doofr would function or any other outcome other than this relatively junior co-pilot manually overriding that? >> given the facts that have come off of the voice recorder that's correct. >> did the company at this point, john has called this an isolated tragedy, saying they are deeply saddened by it. but i'm wondering, in the industry, as we think about going forward, what lessons, if any, should the airline industry be taking away from this? >> well i think we'll have to pay more closer to attention to flight. lufthansa brings their pilots in every year for four trips through a simulator. most airlines only do that twice a year. in any event, what's going to

have to happen in the future is when pilots come in to do their training, they're going to have to spend a period of time, an hour, whatever it is with somebody trained to recognize if someone has emotional problems and try to nip that in the bud. >> appreciate you coming to the phone to put context into this situation for us. john goglia former ntsb investigator. when we come back on "squawk on the street," keeping our eyres on these markets with the dow down 112. triple digits fourth day in a decomplain. twitter launching its competitor to mere mere cat. the ceo speaking to us exclusively.

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twitter's making a big play for live streaming video and taking on start-up meerkat, launching a new app called periscope. julia boorstin got to participate in the beta test and sat down for a first on cnbc interview. >> i'm periscoping right now, live broadcasting this. sending alert to twitter followers. this periscope is twitter's attempt to beat back meerkat, the market leader in social live streaming video. twitter says that periscope has some key advantages.

viewers can interact more easily and periscope videos by default available for 24 hours and broadcasters can save them in their personal library. >> the broadcaster can choose to keep their content available afterwards and make it available for replay. i missed your broadcast because i was busy i can watch the replay, and i see the comments and the hearts after the fact as well. >> periscope gives broadcasters more options than meerkat. in addition to public broadcasts choose to broadcast to a small, private group, and ceo says that broadcast is so fast, it enables better interaction. >> when you are watching a periscope, you're watching video two seconds old. now that's a lot more recent than even watching television not to mention other consumer broadcasting tools like meerkat. we think that's important because it lets you as a viewer be superengaged in the broadcast.

>> now meerkat tells cnbc it's been growing at 30% a day for the last 11 days. it's also featured in the itunes store as the best new app. so we'll have to see if periscope's different features as well as twitter's deep pockets are enough to help it unseat the market leader right now. more on periscope coming up in "squawk alley." back over to you. >> thanks very much julia. good story. all three indices seeing sharp declines in the last week. art cashin will be here live at post 9 to help us make sense of it all, with the dow down 122 points. we're back on "squawk on the street." ♪ at mfs, we believe in the power of active management. every day, our teams collaborate around the world to actively uncover, discuss and

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the market sell-off is picking up again today. the pattern over the last few days. let bring in art cashin director of floor operations at ubs. treasury yields are higher the dollar's weaker. it's not all-out panic mode but it's a sell-off. >> it's not a full flight to safety. there are several aspects to. there is real concern what's going none yemen, will it be a proxy war? it could be on a couple of levels between saudi arabia and

iran for supremacy and influence in the middle east and that may destabilize much of the middle east. that's why you're seeing the bid in oil and several other places. and then where does russia stand in all of this? the russians may wind up seeing it as a great opportunity, if you keep tensions up to keep a bid under the price of oil. so they make take a behind the scenes adventure there earnings season coming up more people talking about no growth in earnings. >> especially when it comes to guidance numbers. you know art, every time in the last few years talking about geopolitical flare-ups that have spooked the markets it pays to sit tight, wait it out, it's a short-term femmephenomenon. >> following history, it is. what i keep a sharp eye on it this moves things up in a variety of ways. even if the militants decide to be adventurous, it's very narrow transit area for probably 40% of

the world's oil. so it could be very difficult. >> there are others who say this is a garden variety correction. a runup after the fed, a flight year despite the nasdaq up 3%. there had to be some profit taking, especially as we near the end of the quarter. is there a little bit of that going on? >> there's a little history going on because the week after the march option expiration has a bias to the downside as least as much as 2% -- we've already done that here so we'll see -- next week a slight bias to the upside, we'll see if the seasonal biases are working in our favor. but it's a news event-driven thing. people will keep an eye, if oil begins to pop stronger then we won't neat flight to safety. that will be a signal things are heating up a little bit. >> earlier this week you said low volume was the waste of a

carfare and clean shirt. >> carfare was worth it. >> rotations in the market you know, biotech going down in the last few days and energy stocks being outperformers, ibm right now is the lead performer in the dow. cisco's at the bottom of the list. that is a good thing you're seeing rotations? >> well you know certainly seems to speak to the end of month and end of quarter. people nailing down profits on things that have had a good run. buying some of the underperformers, as you say. so i think it's natural seasonal portfolio adjusting. we'll see if it persists or activates further. >> where's the floor for the major averages? >> that's tough. we went through the 100-day moving average. i would say in the s&p, look for hopefully some support around 2040, 2043. >> we're at 2050. thanks for dropping by art cashin of ushsubs.

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i'm courtney reagan. here's your cnbc news update. lufthansa executives just finished holding a news conference saying they were stunned by news that the germanwings plane was deliberately crashed by the co-pilot, andreas lubitz lufthansa ceo said lubitz was fully capable of flying without restricts and the airline has no leads on what made him do what he did. he added, there were no signs of terrorism. saudi arabia and gulf region allies launched military operations including air strikes in yemen. the main airport in the yemen capital and a military base were the main targets. rescue workers put death toll at 13 but bodies are still buried under the ruble. protesters gathered to show support of the houthi rebels to forces the president to flee following the air strike sfooz

iraq's request, the u.s. launched air strikes in tick kit thursday in support of stalled iraqi ground offensive to retake the city from isis militants. the bombing marks a significant expansion of the u.s. military role in iraq. that's your cnbc news update for this hour. back to you. welcome back to "squawk on the street." i'm jackie deangelis. the department of energy out wit its weekly report on nat gas storage. a bill this week 12 billion cubic feet in line with expectations but that's more than the five-year average which is usually negative 20. natural gas prices trading 272. now lower, 269. traders are expecting warmer weather to hit our east coast especially here quite soon. so we are going to see prices probably go lower. the trade to be in today, short, nat gas, and long crude and watching the weather forecasts closely. some traders telling me we could

see 225 if we get warmer weather, but not too hot too soon. temperatures are the thing to watch at this point. thank you very much. we want to get back to new details out about the plane crash in the alps. officials saying the co-pilot intentionally brought the plane down. we have on the news line cnbc contributor, gordon bethune. thanks for calling in gordon. to hear a french prosecutor this morning saying that the co-pilot quote,ed to destroy the plane and in the cockpit alone, how does something like this happen in. >> i think the primarily policies differences between u.s. and european union and the u.s. cabin crew member has to replace a pilot so no time are there less than two people in the cockpit. that's not the policy i understand, in the eu. and therefore, that set up an opportunity for someone to act,

as this gentleman did, and destroy the airplane. >> phil lebeau has reported on that as well probably going to be taking a look at that rule in europe and germany, in particular. the lufthansa ceo saying in a press conference today, we have faith in our pilots that this co-pilot in particular passed the checks, passed the test. what do you think when you hear that? how did that happen? and are these tests rigorous enough? what do you know about them? >> i think, you know the predictability of behavior everybody tries find the best people. but unfortunately, as time progresses, people change. he may have had some psychological problems family problems i'm sure they're going to look into that and see if there's something in his behavior that changed over the period. i'll bet you they screened as well as they could to get the best talent. they can't predict that behavior. >> gordon as a former ceo of a major airline, when you think about the position that carsten

spohr the ceo of lufthansa is in right now, put yourself in his shoes. what would be your next step right now? >> well i would do everything i can to help the families of the survivors, assist in the recovery of the bodies provide transportation for the surviving families and information as to what we've got. that's pretty much what the emergency response plan that you follow, you to follow with the government, requires you to done i think he's doing a good job of being open and honest of what's happening. >> when you hear a plane goes from 37,950 at 10:31 a.m. to 6,800 feet by 10:40, what did you think? this could have been a politic cal mechanical failure or does the new explanation make sense? >> if you do an emergency descent, if you lost pressurization, you would enter into a emergency descend that would have the rapid loss of

altitude but also communications, also the transponder would squawk emergency, 7700 and that would be known to the air trafficker controller and level off at 10,000 feet. that's what i've originally thought until i found out, obviously, like everyone else that he was up there by himself and just fine and he manually flew it into the ground. >> gordon a lot of people are learning some of the nuisances about how the secured door to the cockpit actually works. this is something that was introduced of course after the terrorist attacks of 9/11. and i'm just wondering, when that door was developed and that technology introduced, since then, have there ever been other issues involving the type of security that was used in that door and anything like what we've seen in this situation? >> well i reviewed the door design on the a320 a modern design, it's got a couple of

backup features. remember sara if the protection so canterrorists cannot take control. eight strong multilevel safety security door. unfortunately when you have one person inside the cockpit, you're at the mercy of that one person. no one's going to get through the door theit's not going to happen. it depends how long the government requires the door to be. a think a process change so you have more than one person in the cockpit at all times is probably the best outcome to prevent this from ever happening again. >> if all of your years in the aviation business, have you ever dealt with an issue like this where you had a pilot with psychological problems? >> well i've worked at boeing i remember the profile locking the cabin out, killing the passengers in the north atlantic, that was suicide. hearabic.

yes, it has happened before. >> i want to know how unusual this is and what you would say to people who would be afraid. this is -- how can you possibly anticipate something like this? it becomes very hard to trust the airlines and the pilots. >> well i think, sara that's a good point. obviously this is one and it's a million, zillion of flights, so the odds are very low. if the airline does have a procedure, much like we do here in the united states, of requiring at least multiple people in the cockpit, that really minimizes the chance of one person acting unilaterally to kill them all. >> gordon, very valuable perspective on this shocking and disturbing development in the plane crash. gordon bethune, former ceo of continental airlines and cnbc contributor. we want to bring in nbc live near the crash site in france.

what do you know from the scene? >> reporter: lost ifb. >> i believe we are having audio issues. but we will have him back as soon as that connection is re-established. coming up, watching the price of oil because wti in the u.s. is back above $50 a barrel. up about 8% since -- in the last week. is this a temporary surge? obviously there's concerns about tensions in yemen. we'll talk to bank of america's head of global commodity resent when we come back. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant

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latest developments and new revelations about the plane crash in the alps a deliberate crash by the co-pilot. can you hear us now? claudio lavanga at crash site in france. what can you tell us? >> reporter: well we just heard that the families about 150 family members of the victims, arrived ten minutes ago here in seyne-les-alpes the town closest to the site. they were taken -- flown to marseilles on two separate special planes organized by both german wings and lufthansa. now here in attending a special ceremony in a makeshift chapel set up here close by this airfield. after that, they will go drive up to a memorial which was set up, kind of a makeshift memorial set up in a location not a town, just location on a mountaintop with a view over in the distance over the crash site. who wants to go and take a closer look of the crash site

will be taken there by helicopters, as we saw four five helicopters here that were flying in that direction. but the word and everybody's mouth traumatized by the experience is incredible. just cannot believe the co-pilot deliberately downed that plane. >> i know that -- >> all right. thanks very much claudio lavanga, reporting live from the crash site. keeping an eye on markets because while stocks extend a broad sell-off oil prices are surging after reports of saudi air strikes in yemen. crude prices hitting two-week high off of the news. will this rise be short-lived? francisco blanch research at bank of america, merrill lynch. describe the strategic importance of yemen in the energy market as a transit hub and, of course talking about saudi arabia the world's biggest oil producer.

>> i think the main issue in yemen is whether the air strikes that are being done by this coalition and resulting in a proxy war between the two key powers in the middle east i doesn't think yemen as such has a lot of importance for the oil market. yemen is a mall producer. the passage into the red sea is pretty much secured by international and navy operations. so i am not -- i'm not very worried about physical supply disruptions coming out of yemen. saudi production of oil is quite far from yemen, it's in the northeast of the country. remember yemen is the southwestern part of the arabian peninsula. both are pretty far apart. i'm not too worried about this. one concern i have is how this event could potentially evolve into a broader conflict but not

at this stage. >> describe what that looks like. talking about potential involvement from iran and other major oil producer? >> exactly. exactly. a proxy war in the middle east is always of course a risky event for oil marks. there's no question about it. but remember we are coming into it with high inventory levels with production at very strong rates, particularly the u.s. despite the drop in the rig count. we're coming into it what looks to be a soft demand backdrop. yes, geopolitics matter, but ult ultimately holding on to the may wti contract when it comes into expiry, you're going to get oil into cushing and inventoryies there are extremely high. i think that the market overreacted a little bit overnight, why prices have come down $2 a barrel in the last few

hours. we retain a negative bias on the market despite all of this there sticking with your forecast? you're in the low 40s for wti and a first quarter, and the high 40s end of second quarter? >> yeah, we're -- exactly, we're sticking with that. also sticking with brent coming down a few dollars from here. we think the market is recently well supplied. you do have the demand soft -- going soft. there's really -- i think the guy yo politics as always different dimension. but yemen is not a big producer. there's no real risk to oil facilities that emanates out of this yemen conflict. now, the one key issue is whether new negotiations with iran next week are affected by the yemen conflict. we done think that's likely to be the case either. so i don't know. it's a very fluid situation in the middle east but it always is to be fair. >> beyond geopolitics, the

correlation between the dollar and price of oil. dollar's sharply correcting especially against the euro just in the week post federal reserve meeting. how much is that pushing the price of oil higher? >> i think that's been more than half of the story, to be frank, in the last few days, since last week. remember, oil and the euro jumped both after the fed statement on wednesday last week. so we've kind of retraced -- we retraced from the highs and we've come back to those levels where the market bounced to just after chairman yellen spoke last week. i do think it's impacting oil in three dimensions. number one, monetary policy divergence, euro lower yen, big drivers for the price of oil. second dimension is the weakness in commodity currencies, kufr currencies like the canadian

dollar brazilian real impacted by the weaker commodity prices and lowering the price of oil. the third thing is the emerging markets that are supposed to benefit from the lower oil prices which are effectively being hit on the economic front, talking about countries like turkey, which have seen their currencies being negatively impacted with the dollar strength. there's a number of drivers that link the dollar story to commodities. there really is three different dimensions. >> finally just to come back quickly to geopolitics, what would concern you? in other words, what would affect your forecast in terms of what you saw on the ground? >> well i mean if i saw the tone with -- between saudi and iran start to elevate itself on the back of this yemen air strikes, i think that would get

me pretty worried. for the time being, you know obviously, there's going to be little recognition on the back of the iranian government to find involvement in yemen, in my mind. there's for the time being the risk is moderate. nobody wants, i don't think, a broader regional war but i think if the tone between the saudi and the iranian government started to elevate itself on the back of something like this that would get me pretty worried. that's when i would start to look deeper into the potential disruption in supply. but remember, one thing that the saudis may do too, they may increase production to put pressure on iran. this works both ways. the saudis still have capacity to put downward pressure on prices if they want to hurt iran. it's a mixed view here. >> for now, we've got wti cruding up 1.53.

francisco blanch, good to see you. >> when we compact, one of new york's hottest start-ups, learnvest bought by northwestern mutual. the ceo of northwestern and learnvest, that will be during "squawk alley." we'll be right back. barbara just bought a bike. she wrote a tweet about it. you can't learn much from that. but take data from millions of tweets combine that with your company's supply chain and sales data. apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build what to make them from, where to sell them. because barbara and the world just told you how to build a better bike. there's a new way to work and it's made with ibm.

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. dow coming off the lows. let's get to chicago and the cme group. rick santelli has the santelli exchange this morning. hi, rick. >> this morning i do have a special guest, david stockman needs no introduction. thank you for taking the time at this very important intersection of central bankers and global economy. thank you. # >> glad to be here. >> david, when i was listening to the janet yellen press conference last week, there were issues regarding the richness or cheapness of the equity markets and i believe that janet yellen's exact words were on the high side. can you give me your impression of whether stocks are rich or cheap? >> well i would say they are way on the high side.

look at the biotech sector this morning. nasdaq biotech. 150 companies. they're still trading after the correction at a trillion dollars worth of collective value. they had $20 billion worth of income or profit reported to the sec in the year just ended. that's 50 times. if you take out the four or five big cap biotechs you have something even more fantastic. you have 280 billion worth of market cap for the 125 biotechs other than the large ones that have $10 billion of negative earnings and virtually no revenue. now i would say that's a bubble. i would say that's irrational exuberance if we ever had it. look at the russell. it's trading this morning notwithstanding a little bit of correction at 89 times the actual sec reported earnings of

those 2000 mid cap and small cap companies in the united states. even take the whole new york stock exchange the median company today is trading at 22s times earnings for those who have positive earnings of the highest that we've had in history and even higher than 208 or the dotcom bubble in the year 2000. so i -- >> let me stop you there, though. let me stop you there. okay. i get hundreds and hundreds of e-mails a day with very good wall street type research. i don't see it. so what numbers are you looking at to find this extra richness that wall street seems to be overlooking? >> well, i think that we have a divide between the gap honest numbers that are reported to the sec, signed off -- >> hold on. so viewers understand let me interrupt you gap being

generally accepted accounting principles. continue. signed off by the ceo and cfo as being accurate and honest on penalty of jail time. those are the real earnings -- >> where does that paperwork go? >> that goes -- that's what's in the 10ks, 10 qs. >> the sec. >> to the sec. that's what the wall street sell side analysts say totally ignore. we have a better answer. it's called forward hockey stick x item earnings that exclude any kind of write down any kind of so-called nonrecurring event that obviously lowers the earnings. let me give you -- >> that sounds honest to me unless the reoccurrences reoccur too often. is that the case? >> the fact is they reoccur quarter after quarter. i looked a the s&p 500 for seven years from 2007 to 2014.

the earnings of all companies combined reported to the sec were about $5 trillion. the earnings that the street said you should look at x items, were 6 trillion. i would say a trillion dollars worth of difference is a difference and it fundamentally affects valuation. beyond that -- >> we're going to have to stop it there. i'm on a hard break. i am going to have you back. i want to hear part two and part three to this story. it seems like some of these numbers have multiple interpretations. thank you so much, david. sara back to you. >> all right. thank you, rick santelli. let's go over to jon fortt with a look at what's coming up next on "squawk alley." >> good morning, sara. the meerkats have a new predator it's parascope, twitter's app that does live streaming. we will get into that. learnvest the financial planning application has been acquired for a reported quarter billion dollars. we'll find out more. and it is phone day.

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