live from new york where business never sleeps, this is "squawk box." good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. stocks falling in china to four year lows late in today's session. check that out. you see the shenzhen composite down 6.6%. shanghai composite off by 5.25%. in the united states you'll see that at least at this point futures are standing pat even with all of those losses that we saw in china. however, watching oil, watching what's been happening with the dollar, this could be one to pay attention to today. >> okay. we have other stories that we're watching this morning. macy's coming under more pressure from an activist. "the wall street journal" saying

starboard is urging them to strike a real estate deal. in a letter to management starboard suggesting that two separate ventures, one for macy's landmark properties, harold square, and a second one formal locations should be made. starboard owns 1% share in macy's. they say it could create meaningful and lasting value for them. also, of course, others have tried this real estate maneuver before. bill akman tried this with target. we'll see where this ends up. they think macy's stock could trade as high as $70. shares trading at $35.87. t"the wall street journal" s saying kohl's is thinking of going private. it's down 30% from the peak. the ceo of volkswagen saying they believe a new catalytic

converter system will fix 400,000 cars capable of cheating diesel emissions tests. also in car news, some tesla vehicles can now park themselves without a driver even being inside. a new software update was beamed, scott jie, to some customers over the weekend. the update also puts new speed limits on tesla's semiautonomous auto pilot mode and improves the ability to stay in its lane even when the markings are faded. it lets drivers summon their self-driving, self-charging cars from anywhere using their phone. that's weird. that's like the the lone ranger calling his horse, trigger, to come over. >> you're going to short parking lots? >> yeah. >> eventually if the car never has to park it would go to different places, weird -- and then you'd go get the -- >> do you know how congested

it's going to be in new york city if everybody's trying not to park. >> people do that now and i don't like it. they park -- you know, they'll park right at the entrance to wendy's if the person they brought there is going in. i looked at someone the other night, may have been at wendy's -- >> you were hanging out -- >> i may have been there but it wasn't for me. people here can't back out here and other people -- >> because they don't want to walk the six feet. >> the person they let go in there is eating wendy's in the first place. secondly, doesn't want any exercise at all to go get the food that already made them fat and then they're not even -- it's like, you should be parking like a mile nava way. >> you were there for a friend? >> i was there for a family member who likes the fries. sources tell cnbc that apple music has topped 10 million subscribers. >> including joe kernen. >> including me. i'm embarrassed for myself. it took rival spotify six years

to hit that mark. at that pace apple music could be the top music subscription service next year. >> wow. >> any album i've liked, i haven't already that in 20 years. i'm going to download it and lis zwroen it. it's not the milli vanilli style. >> close? >> yeah. is that the market leader? >> yeah. this is half that. >> it plays a variety of things that are similar to that? >> yes. >> i haven't done that. all i do is something i know. >> you haven't done the list. >> no. >> shared list with friends? >> no. >> can we share lists? >> i think that it's almost like with us it would be like yin and yang. like everything. >> the algorithm would figure that out. >> i was thinking what they were going to talk about today. they didn't assign me to cover like the nfl and basketball and

you to cover the golden globes but that's basically -- that's basically what we do. any golden globes questions, you are ready to go. >> hilarious. >> it's nbc. >> ricky gervais. >> nothing bad to say about it. it's an nbc thing. >> you would have appreciated some of this. >> i see it often twitter. >> delivery is better than the written. >> than the written? >> yeah. lee -- >> her funny with mel gibson. >> very funny. >> did he say sugar? did they bleep that? >> they bleepd that. >> yeah. yeah. >> sean penn joke was pretty good. >> which was? >> i didn't hear it. >> sean penn -- >> that's because half of it was bleached out. >> i wi -- bleeped out. >> the mel gibson introduction was worth the entire thing. >> then he walked back up to say that thing. >> yes. >> seeing ricky every three -- >> reminds me like to get a

colonoscopy so he came back out. he had a beer on the thing. after he introduced him, he grabbed the beer, grabbed it and ran away. >> live and let live. i'm not going to be cynical about the self-absorbed -- >> that's why you would have appreciated it. >> oscars and golden globes together, it's two. two divided by 365, what percentage of my life do i have to deal with it? not very much? >> no, but ricky gervais mocked the entire awards. >> he should. >> told them what he was -- >> including keeping one by his bedside. >> i knew this morning you were not going to think the golden globes were a big thing. i pulled out a business story. i printed this out so you would know. golden globes, a win is worth $14.2 million in addition for every film that wins this. oddly enough, more important than the oscars. give credit to nbc.

an oscar win is only worth $3 million. >> the oscars now, we know how the grammys give a grammy to everybody. with the oscars, they do ten best pictures. >> there's only five that are good enough but they do ten. they throw anything there. it's the industry. the motion picture industry. you're being sold. it's okay. i'm okay with that. 2 out of 365 -- look at these people. anyway. another one of my favorite subjects, no winner's in saturday's powerball drawing. i tweeted about this. the jackpot in the lottery is estimated to rise to $1.3 billion by wednesday. the chances of winning are 1 in 292.2 million. there have been no jackpot winners in the last 19 drawings. becky says you have to be in it to win it. my comment is you have to walk outside to be both hit by lightning and attacked by a

great white simultaneously. >> we learned the hard way on saturday night because we went out to dinner. we were right next to a little bodega. >> you went to get one? >> $20 down. >> laura did the numbers. >> we got two of the numbers, waiting for -- maybe you need the powerball. we thought maybe we had won $7 but we didn't. we were very excited. >> my people have told me, i don't know whether they think they're clever or funny. this is what i'm going to do when i win. >> can i say this was our dinner conversation saturday night? >> why not every day just say what if i had a trillion dollars and just go from there? just every day. don't wait for the lottery because it's never going to happen anyway. any given day just pick a number. pick 100 trillion. pick the fed balance sheet if you want. that's yours. now go ahead and you think about -- >> what are you going to do? >> yeah, you will do.

>> the great white i think has to get up on land and be one of those walking fish as you're being struck -- >> better osds odds of a land shark. >> get a terrific disease. you'll end up with something you've never heard of with three months to live. >> are you going to buy tickets? >> to what? >> to the next drawing? >> no. i will not. it's a tax on the stupid. >> what happens if -- >> no. no. >> what happens if a friend, a friend were to buy one. >> that's what my father says, a tax on the 1250u7stupid. >> would your wife buy one? >> no, forbidden. >> if she buys $2 -- >> if she's with a friend who buys one? we split ours. we made a deal. >> morally opposed to it. >> i don't even fan duel. >> no. i won't gamble. >> i'm told by our producer, you guys pass it when you drive in. the big lotto billboard on 50th street. you pass that?

>> no. >> it only goes -- it's going to miss a digit. >> only 100 million -- >> apparently 9999999. >> like mcdonald's, billions and billions served. stocks in china selling off. susan li joins us in china. what were the thoughts, concerns, what were people talking about as this was happening? >> reporter: well, yeah, there's a lot of bearishness. there was pretty good volume to sell today. speaking to some brokers in the middle of the session, they said looking at their screens sell orders were 10 to 1. you can imagine the size of a loss trying to be offloaded right now. we had japan being closed today. still some big declines over in china. hong kong followed suit. interesting trend emerging today was the fact that we are looking at redemptions now in asia pacific ets. some say to me that this is not a one off event.

expect selling to continue for the next few days, next few weeks and possibly the next few months. what do you think has spooked investor sentiments. people are pointing to the ppi numbers continuing to see a deflationary trend in china. you also had a stronger chinese r r&b. they don't know what they want to price the chinese euro at. the high board rates spiked to record levels. that's telling investors there's a drainage of liquidity. tightening conditions possibly. the reason for high bore spiking to the record levels because they're trying to protect and intervening in the currency markets off shore to defend the chinese currency which means they are selling a lot of yuan and off loading a lot of u.s. dollars. that is spiking up rates. there's a bit of a liquidity issue in the hong kong markets. where do you think chinese markets are going? technicals are flashing on their

screen saying we could be retesting the 2015 lows once again of 28.50. we could be 30% down from these levels. as you can mention, not a good way to start off the week. back to you in new york. >> susan, thank you. quick check here at what's been happening in european markets in some of the early trading there. you're going to see that at least right now it looks like markets are relatively flat there, too m. >> all bouncing earlier. >> really? >> yeah. ftse down 1/4 of a percentage point. last week crude was down 10%. this morning it is down almost another 2% this morning. 32.53 for wti. last week the dow, by the way, down 1,078. >> 6% move in a week. i thought today when i saw -- we were up about -- our futures were up about 50 coming in and all of europe was coming up. i thought it was because 5% is

hideous in china, but they didn't do anything. it stopped at 5. >> right. >> at least you know it's 5. it's not 15 where we were last week and you didn't know. they would stop it at 7 or 8. who knows what it really was. >> right. >> 5, some came in. they're buying anyway probably. >> that's interesting. now trigger was roy rogers horse. i messed that up. >> silver. >> high ho silver. >> our viewers know everything. did both of them whistle for their horse? >> i don't remember. >> i don't either. roy rogers is confusing because he was a real person and also like a tv star. dale evans was a real person and he was a restauranteur. >> chicken sandwiches. >> i don't think there was any beef. >> used to go there as children. >> i'm kidding. i love them. how about that cheese?

neither the meat nor the cheese was real. >> are they in business anywhere? >> roy rogers is around. if i see one, i stop. >> are they still around? >> i thought they were taken over. >> i get them mixed up. >> i think it's still around. for more on the global markets on the slump, let's bring in mark grand. >> still around. >> they are still around? >> that's good. >> so, mark, let me see. you're worried about china. you said by now most people would see a bounce in our markets. it's so anemic that means it's still top heavy. china's still the dog that's wagging our tail at this point probably? or the tail? >> it's certainly one of them, joe. it's triggering our markets. >> yeah, that's good. >> so, look, i estimate the real chinese growth about 2%. yuan, i expect further

devaluations to come and some significant ones. i think the chinese market down 5.3% today. you'd normally think in the environment we've been in, joe, that the u.s. markets would have bounced after last week. the fact that they are not bouncing says we have further weakness and further downdraft in the u.s. equity markets. >> we'll see what happens by the end of the day and i don't mean at the end of the day, i mean by the end of today because i hate that expression but down 5%, there's no way we're bouncing today with china down 5%. that performance is probably, you know, somewhat encouraging just being up at all with china down another 5%. can i ask you about, was that david stockman? because he's nuts. he comes on and i like him and, you know, i see him all the time on some of the crappy tv that i watch. he's like doing some infomercial for gold or something or silver. i don't know what it is, but

it's some -- i'm not sure it's a fly by night firm. maybe not. i probably shouldn't say that. he says that that jobs report that if you factor out every year they add a seasonal adjustment to that number and this year since it was so warm there's no reason to think that those jobs are actually added but they added them anyway. if you take those out only 11,000 jobs are added, not 292,000. do you think there's anything to that? i read that and i said, i kind of wrote it off. do you think there's anything to that? >> joe, there were two very interesting things that came out. i pointed out some commentary because i thought there was some credit. that was the first i saw it. then i went back to the bureau of labor statistics and verified it. it was all seasonal adjustment and then they've been doing it for the last 12 years but there is really no reason to have done it so this giant number of 292,000 new jobs added is really

only 11,000. the other thing that came out over the weekend that i thought was interesting was the feds' balance sheet without any announcement at all declined about 600 billion which means the fed sold and let things roll off, which is what i've been encouraging them to do for quite a while. in fact, that's what they appear to be doing, which also means that the fact that the ten year, you know, around the 215 level is incredibly strong and likely to get higher in price, lower in yield given what the fed sold off. >> yeah. >> do you think they actively sold or they just rolled it off, mark? let it roll over? >> right. to roll off that much, becky, i'm not sure they had that much to roll off. looks to me like there was some selling as well with the majority of it being a rolloff.

that's what my take has been. >> tomorrow we're going to -- when's the state of the union? coming up. i guess we're going to hear that the republicans are just selling a lot of gloom and doom and this looks like it's legacy building sort of with less than a year -- with a year to go to make things sound better than they are. tough to convince 75 or 80% of people who say we're headed in the wrong direction and who feel that things aren't -- you know, in the economy don't feel like 5% right now whether it's the participation rate, the number of people not working as many hours as they'd like or whatever. we are going to see that. you would take issue with the notion that we're being too pessimistic? >> i don't know if we're being too pessimistic. >> we're not being too pessimistic. things are not great in the united states in terms of the economy? this is a weak recovery?

>> yeah. yeah. >> will the fed be able to do another hike or will we stay where we are or go back down it's so weak? >> i think the fed is in a difficult position. i think they've made a huge mistake as i've said before. i think they may have to reverse course at some point probably in the second or third quarter. you've got all kinds of economic headwinds from oil as becky pointed out a minute ago. we're down to levels that nobody could ever have believed and you've got the problems in china. you've got the ecb doing their quantitative easing while the fed is raising rates. you've got earnings that according to reuters this morning are looking none to rosie for the forward outlook. you have a pe multiple that's higher than the ten year average. to me, as i've said, i have some things i really like as i've said to you, joe, like muties,

closed bond funds, they're good places to put money right now, but i don't think the equity market or corporate bonds are places where we should put money at the moment. >> mark grant, thank you. appreciate it. >> thank you, joe. >> we'll see you again soon. i think there's also going to be an empty chair at the state of the union. normally invite people to come. there will be an empty chair. i think it represents people that got shot. >> yes. >> not the same as the clint eastwood empty chair so i don't know whether they thought about that, that might not be -- that's what i think of when i see -- yeah, you thought clint eastwood empty chair. no? >> 24 seats. satya nadella is one of the people sitting there. on the gun control issue going to leave one seat. >> going to talk islamic terrorism. >> she doesn't say islamic

terror. >> doesn't use that term. >> let's hope not. let's hope not. >> it's always isil. news that you have heard by now certainly overnight. legendary singer/songwriter david bowie died after an 18 month battle with cancer. he was only 69. he just released his 29th album on january 8th which was also his birthday. just missed having a good birthday. he was inducted into the rock and roll hall of fame in 1996. he was a young guy. what scares me is some of the icons we all grew up with are -- >> yeah. >> it's hard to say good-bye to this guy. how old is jagr? -- jagger? >> i never bought a bowie album. i liked covers that a lot of people did. were you a -- >> i used to listen to him in college? >> i owned a couple of albums. >> you do? >> i still have them on cd.

>> on cd? >> yeah. not eight track, cd. cds are the new eight tracks in this environment. we've got to go. coming up, oil prices slumping overnight. we just talked about it. we have a lot more. we have a read on what's driving all of this. first on cnbc interview coming from the detroit auto show. phil lebeau. we'll get a sneak peek at the porsche turbo. >> wilbur ross is here to talk about the weak start to the markets and global investments. we have all of that. ♪ ♪

welcome back to "squawk box." oil prices slumping overnight. let's bring in john kilduff. he's a cnbc contributor. that would be a good price where you see this is going. if i read the notes over the weekend, you claim we might get as low as $18. they may need a quote, unquote bailout for the industry. what is that about? >> i'm worried. i'm worried about the energy security future. it's clear to me. why i was saying 18, low 30s last year is we need a shocking number for this industry to finally react on a global basis.

everyone is hunkering down. everyone is scrambling to live within their means right now. i'm afraid that the saudis are going to have the deep pockets here and our u.s. oil industry is up against nationally owned oil companies in the world. i'm afraid as what happened in 1988, they get slaughtered, wells get capped ad hoc in a poor fashion and we're put-back in the box where we're entirely energy dependent and over the barrel. >> when you say bailout, yo you are' talking gm style, t.a.r.p. style bailout? how would you or kes straight that? >> i floated some ideas in an op ed on cnbc.com. i came up with ideas such as sort of enhanced unemployment benefits or skill set support for the work force to keep that highly trained, highly technical work force in place, that maybe the department of interior or department of energy should be able to buy up acreage of drill but not completed wells so

they're at the ready to go. >> john, to this point people have said we thought prices would be low for a long time. as soon as prices were picked back up, the wells could be put-back on. if they hit a catastrophic low that will flush out the people who know what they're doing? it will keep money away from the industry? >> that's my concern. that's my concern. a sort of catastrophic price drop where the industry gets ravaged. >> i can't believe -- this is the same kind of stuff that we always do that doesn't allow for normal price discovery and if it goes that low, it's going to be so cheap we'll use so much of it everybody will have six suvs and it will immediately self-correct. >> i just feel this time, joe, we're up against national oil companies. we're up against other countries like saudi arabia who don't have our best interests at heart. >> they want retribution.

they said they were going to hurt the fracking industry here. they really are. even though their own people are suffering from this. >> yeah. very much so. >> they're making a statement, huh? >> it's national security. i agree with you. i'm lukewarm on the idea, it's just that we saw what happened to us during the 2000s basically being at opec's, you know, beck and call. >> the quote, unquote, systemic risk is to the economy of the country. it's not a systemic risk. there are so many companies that would have to be bowing out. it's not one or two. >> yes, it would be industry wide. a lots of marginal producers. the worries in the high yield debt market, that's the group. by the way, this would be voluntary, what i wrote. they would be subject to a -- >> we wanted prices to go down. >> we did, but if they go down too low and get put out of business, they can't compete with the 2 and $3 pro tux costs the saudis have. >> real quick. foreign policy magazine has it as a piece out over the week

end. oil prices have hit a ten-year low, they're not going to stay that way. the argument they'll be up three fold. >> that's incredibly wishful thinking. >> that's a supply issue or demand issue or both? >> mostly a supply issue. demand actually has been good for fossil fuels even three last year but we have this huge overproduction and now to add it to everything is the troubles -- i was talking with wilbur ross in the greenroom here. things aren't good in china. they're as important on the demand side as the over supply system is for the saudis. this is a pipe dream if you think these prices are going to triple. >> real quick, if saudi puts some of its business and makes it public. they want to do that with saudi a ram could h aramco. the public market won't accept a losing proposition? >> absolutely not, but they make money on every barrel. people get confused with the idea what they need for their

budget to keep the home fires burning versus the cost of production. they make money on every barrel. what's fascinating in the s1 is what are the capacity and the numbers. they claim it's 12.5 million. some argue it's 15 million barrels. that will be fascinating information. that's a sure fire winner. they print money no matter what whether they can afford to keep the populus come is another issue. >> john kilduff, thank you very much. auto dealers are taking over detroit. we're getting a sneak peak at the 2017 porsch e-9e 9 porsche.

ph >> reporter: let's show joe this. >> i know you can't wait. this is the fastest, quickest, most powerful, most luxurious 911 on the range. top of the line 911 turbo s. most powerful. 20 horsepower more. 540. >> reporter: what kind of 0-60 time? >> guess. less than 3 seconds now. 2.8 seconds. >> reporter: 2.8 seconds. >> you're coming off a record year for porsche here in north america. people want to focus on the suvs and the macon was a big part of that this year. there's still a sweet spot in the market for these cars, isn't it? >> 911 has always been very strong here. very core market for us in the united states. we are selling 1/3 of all of our 911s in the world here. >> reporter: 1/3 are here in the united states? >> yes. if you take the mix of all the 911s sold in the united states, selling more than 20% of these guys here. >> you had record sales globally for porsche?

>> first time we sold more than 200,000 worldwide. increase of 90%. 51,000 cars sold. fourth consecutive growth year for porsche. >> reporter: you have a lot of people like joe who love the 911. how do you convince them that mission e will be the successful model? >> this will clearly live show where porsche is headed to. the first all electric car we gave the green light in germany. we are putting aside 1 million u.s. dollar for this car which will come in a decade. and we show the concept car in frankfurt, just a few numbers. >> reporter: right. >> less than 3.5 seconds, 0-60. 600 horsepower. >> reporter: that's down the road? >> down the road and it will not

be purely an electric car. it will be the first real sports car with an extra engine. the best way to show it, drive it, feel it, smell it and you will see it's a porsche. >> reporter: we're giving joe the first peak at the new 911 turbo s. there you go, joe, just for you. >> phil, why would someone by a starter ferrari for 200 when you can buy that for -- >> what brand did you say? >> reporter: there you go. he's listening to you, joe? >> you don't need anymore car than that for 150 or 160. i just don't understand. that's why porsche is pretty effective in terms of a competitor to these other cars, because, i mean, you barely -- i would -- i'd jones for a $400,000 ferrari but i'd rather have that than the starter ferrari, i think. >> i know the difference. i would say, joe, to convince you is that you can use this car

every day. everyday magic. >> i know. >> you can use it to work and you can have some -- some fascination when you want to get rid of all the stress you have in the office. >> reporter: joe is all about stress and fascination. back to you. >> i don't know about the monthly nut though on that, 160. >> what it breaks down to you? >> it would be over 2,000 a month. i could never -- >> i did hear you giggle when he said 0-60. >> 2.8 seconds. so many times i need to get there than 3.5 seconds. i mean, i need that .6. i think if you could add all of that, it's like -- >> save a lot of time. when we come back, stories that will give you a leg up on the trading day ahead, including deal news and a rundown of this week's big earnings report. "squawk box" will be right back. enthusiast. mmm, a perfect 177-degrees.

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time forex he cantive edge. giving you a leg up on the trading day. george hines, president of img. expected to announce that bruin sports capital teaming up with dan gilbert who will be on the show tomorrow. the major advertising agency wpp will be creating a firm called courtside ventures. the new company will be focusing on data analytics and sports ventures. they'll set up an office in detroit and new york. as we mentioned, show you a screen, dan gilbert will be on tomorrow. we'll talk to him. the george pine company creates live events. deal with the nfl. you remember the tickets.

call it the nfl experience. he'll try to do it with the other leagues. >> he has a new -- what is it, you see the rocket mortgage is quick ken? >> quicken loans? what is it? >> they do five names -- five words that begin with mort. mortality, morbid, mortician. all of them bad. all sound like you're dead, mortgage. they put a new name next to t rocket. they show a rocket. who doesn't -- remember long ago rhoda -- >> i like watching rocket. >> i like watching rockets take off. sort of the same thing. we ask him tomorrow if we have time. earnings reports take off. alcoa after the bell today. csx reports tomorrow. then thursday jpmorgan reports before the opening belle. intel reports after the bell. then on friday we'll get wells

fargo, citigroup and black rock. we've got that going for us. join us on the set so we talk china. dismal start for the end of the year and bmw board member ian robinson will give us a sneak peak at the company's new vehicle. from detroit, ford ceo mark fields will pull the sheet off the company's latest offering. all of that from the auto show. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep it all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberry apple scones smell about done.

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welcome back, everybody. we've been watching the futures. you're going to see that things are in positive territory. dow futures up 50 points. s&p futures up by 6.5, nasdaq up 17. this is coming despite pretty significant losses in china once again. the chinese markets extending further with another selloff. the shenzhen down by 6.6%. shanghai off by 5.25%. wilbur ross of w.l. ross and company, the chairman and ceo is joining us to talk all about this. wilbur, your concern with china is that the economy there is going to stay worse for longer than people are anticipating? >> i think that's likely to be true because they're juggling so many problems all at once. they're trying to manage the transition from capital investment and export base to service-based economy.

second thing they're trying to do is to deal with their currency, let it become a real currency. the problem with that is it's greatly over valued. the yuan has gone up 40% against the mexican peso in the last ten years. during the same time wages quadrupled in china. that's a deadly combination in terms of their competitive situation. then lastly they've shown themselves a little bit fumbling in terms of trying to deal with the securities markets and deal with the debt burden in the economy. so there's a lot going on there, plus the anti-corruption plus capital outflows. it's hard for anybody to manage that. i think they're having a struggle trying to figure a path through it. >> if that's your thesis, then how does that -- how does that affect your investing style for 2016? >> well, it makes the u.s. look

relatively better because we have -- god knows we have our political problems right now. nothing compared with what you see going on in lots of other parts of the world, plus the other emerging countries are being exported, too, with china's problems. emerging countries are 58% of the whole world economy right now and china has a negative trade balance with the whole rest of the world except for the u.s. surplus with the u.s. is what gives them an overall positive. so that means if they slow down they're importing less from everywhere else. >> when you say the u.s. stocks look a little more attractive, is that stocks that don't include multi-nationals? are you only looking at u.s. specific companies? >> yeah, i think that. also some of the multi-nationals. alcoa is doing a very good job of managing through the very, very tough period. >> that is the last stock i would expect to hear you say

after what you just said about china? >> well, alcoa is adjusting to it because they made this big move into titanium and other different metals and that's why they're doing the splitup. chances are there's more value in the newer things that they've been doing than there was in the old stuff because china's exporting an awful lot of aluminum and it's a real problem for everybody. the price is down 25% in a very short time period. commodities don't go to zero. eventually they've stabilized something above the marginal cost of production. >> we had john kilduff on. >> i don't think it will be there sustainably. it isn't going to be the case. there's relatively little oil in the u.s. that could come out at $18 and be profitable and while

it's cheaper to produce the oil itself in saudi and many of these other countries, they can't afford it from their social budget point of view. i think it's no accident the saudis are talking about taking aramco public in the context of terrible oil prices. what could that be about except trying to help them get through this period of budget deficit. >> other stocks that you like outside of alcoa? >> well, i think shipping stocks continue to be a very good interest. charter rates are good for tankers, both product tankers and especially crude tankers and the highest cost of operation is also bunker fuel. so here you have the happy confluence, more physical volume for them to haul than the larger single costs going down. the asset values haven't really changed nor have the stock

prices in over a year. >> wilbur, i want to thank you for coming in. always a pleasure talking to you. >> thank you for having me. >> good to see you this year. >> when we come back, another car segment. we have bmw set to take the wraps off the detroit auto show. just a moment. the future belongs to the fast.

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debuts this morning at the detroit auto show but you don't have to wait because phil lebeau has a special guest and a sneak peek. >> thank you. joined by ian robertson board member for bmw. let's not make people wait any longer. let's give people a sneak peek of the new model. tell bus the x4. the suv market has been red hot for you guys. >> it's been going year-over-year. this car in particular hit over 400,000 sales last year for the first time ever and on route to half a million. it's the biggest car in the bmw world. this is the latest edition to family. it's the m version and four liter engine, 355 horsepower.

4.5 seconds zero to 60. styling. strong sitting on the road. >> there were a number of questions raised after the december auto sales came out about potential for an incentive brewing amongst the luxury automakers and bmw's name was brought up in particular. are you putting more money on the hood for buyers here in the u.s. to keep those sales going? >> if you look at our december numbers we eased up in december. we didn't see the necessity to push the volume like other manufacturers did. it's always finding the balance between what we wanted in the sales volume versus the profitability of the company. at the end of the day profit always comes first. >> you're seeing demand on the luxury market. >> absolutely. the market here has swung more hopeful into suvs and we're sitting around about 37%, 38% of our volume is on the suv. new x1 arrived in the country before christmas.

spartanburg is in development of the x7. >> ian robertson board member for bmw joining us here with a sneak peek. we'll be talking with mark field ceo of the ford motor company coming up a little bit after 7:00. back to you. >> phil, thank you. see you again in just a few minute. the markets in focus. stocks in china selling off overnight. shares there hitting the lowest levels in four years. there was a decline of another 6.6% for shenzhen. a drop of 5.25% for shanghai. we'll talk with david lebovitz and jim o'sullivan. "squawk box" will be right back. it's hard to find time to keep up on my shows.

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. behind the wheel with ford. ceo mark fields joins us for our first on cnbc interview from the detroit auto show. we'll find out if he sees a sales slow down around the bend. >> not so fast eddie money. >> i got two tickets to paradise. >> the powerball jackpot now more than a billion dollars. >> why make trillions when we can make billions. >> the next drawing just two days away. you got to be in it to win it. second hour of "squawk box" begins right now. ♪

>> announcer: live from the beating heart of business, new york city, this is "squawk box". welcome back to box right here on cnbc first in business worldwide i'm andrew ross sorkin along with becky quick and joe kernen. we have sad news from the world of music. singer david bowie has died at age of 69 after an 58 month battle with cancer. we'll react to his passing which is pouring in from around the world. bowie made 26 albums, created 56 music videos, and released more than 100 singles over his career. we have more on his life and legacy in just a bit. the business world this morning focusing on what's happening with markets in china. also what's happening right here in the united states. check out the futures this morning and you'll see some green arrows, a rarity after last week. dow futures is up. s&p futures are up by 5.5. nasdaq up by 14. two retail stocks in the news,

macy's and kohl's. macy's is being urged to unlock the value of its real estate holdings through a variety of moves. a letter was delivered to macy's over the weekend. kohl's is considering taking itself private or even breaking up the company. the company's board is expecting to hold discussions on its various options sometime this week. also gasoline prices are continuing to edge lower. this is coming as oil prices are collapsing but the latest lundberg survey shows prices have dropped by a penny to an average of $2.05. >> apple music has over 10 million subscribers in six months that it launchd thed and took spotify six years to reach that amount.

the iphone 7 will come without a head phone jack which i don't understand what that means. >> i'll explain. what they will do, supposedly, this is according to the gossip rumor mill is they will have two ways to use head phone. bun bluetooth. buy them privately. set up a beats head phone. the other is they will allow you to plug it in but plug it into the same port that's used for power. >> wireless charger at the same time. >> there's conversation about whether the power, you won be able to do both at the same time. nobody knows. >> additionally sources say the phone will be thinner, noticeably thinner, very likely support as we just mentioned wireless charging and waterproof. managed the trade higher which wasn't a great day on friday but

moved back to 97. down from the highs. >> we have another selloff taking place in china. stocks there hitting four year lows. susan lee joins us now. >> reporter: yes. some good volume across the asia-pacific despite japan was the largest market in the region of closed. that tells you there's a lot of pent up demand to sell in these markets. we got a bearish signal with a lot of redemptions taking place in etfs across the asia-pacific. this is not a one day event because once they start redeeming this could take days, weeks, months to unravel and sell into these markets. also talking to some brokers during the session looking at their screens sell to buy orders were 10-1 and that bounce back on friday from what they understand is all short covering hedges have been short since tend of december heading into 2016. so they continue to see this bearish and continues across the

asia-pacific. what's happening in china is a bit concerning sirns we have the inflation figures over the weekend we have deflationary figures in china. ppi down for the fourth straight moynihan china. there's no uptake in that large economy. what's going on with the chinese current circumstance yuan. second day of strength. there's a lot of talk across town that the seven handle could be breached this year in 2016 versus the u.s. dollar so could go a whole lot weaker from 6.5. the high rate to the intervention we're seeing from chinese authorities to bump up the offshore r and b, so they are intervening in currency markets and buying u.s. dollars and off loading chinese current circumstance that's spiking interbank rates and that shows the liquidity picture means there's a drainage taking place in hong kong. people are concerned this will have an impact on markets going

forward. there's a lot concerned right now and people don't see any recovery at least for the next few weeks. back to you. >> susan, thank you very much. susan li. stocks trying to recover here in the united states. joining us is divideavid lebovi. also jim o'sullivan who is chief u.s. economist. gentlemen, welcome to both of you. david, let's start with you. what's happening with china and why is that not affecting our stock market this morning? last week every time china had any issue it played out here. this morning that's not the case. >> hopefully what we'll see investors look through a lot of the noise which is coming out of china. when you look at what they were doing in terms of the currency these small we valuations creates a negative feedback, undermines currency, makes people say look this is a managed economy but can they manage it. that sent shuders through the

u.s. economy last week. we're focusing more on earnings and as we embark on earnings season hopefully we get positive data bringing people fwhak to the stock market a little bit. >> you think the selling was overdone here in the united states? >> it does feel a little bit overdone. i'm not sure s&p 500 is worth 2100 but i'm not sure it's worth 1900. i think there's somewhere in the middle that we can call fair value. we need to see that earnings growth. >> jirjs we just spoke with wilbur ross who thinks the economy in china will remain weaker for far longer than people are anticipating at this point. does that have any impact on the united states. he looks at it and says the united states looks to be a better place to be investing. what do you think? do we import any of that weakness? >> in the last year china has weakened a bit. their official numbers so 6% to 7% growth. people question that. there's no question china is growing reasonably solidly.

is there a sudden new slowing. we this slowing not just in china but in global trade flows over the past year and despite those global head winds u.s. economy is chugging along we're getting over 200,000 jobs a month. without those global head winds the economy would be stronger and that reflects how uber monetary is. >> we're looking at an industrial recession, a lot of people have worried is going to bleed over into the rest of the economy. do you think that could happen? >> what's what we're on watch for, absolutely. you look at the two surveys and the manufacturing number is a little below 50. not tremendously so. historically for a recession in the economy at large. so that's a little bit below 50 for manufacturing sector. nonmanufacturing is still fairly high at 55 plus. put the two together, manufacturing is 12% of the economy it's a 54 plus rating. that's something to watch.

does manufacturing weakness spread to the rest of the economy. so far spreading is limited. employment report we're getting 200,000 jobs a month which is pretty strong. >> what worries me more is watching rail car loading, watching truck loads. >> that's manufacturing. >> right. also telling us that things are weaker in a lot of different industries. what about housing? >> i think housing number has been softer recently than expected. i mean part of the weakness has been because of changing rules and mortgages. the existing home sales were distoward by these new disclosure rules which delayed closing. there was a plunge because of that. that's just temporary. the other number is housing starts, new building sales. they have been more flattish. the trend looks up. they don't look down. numbers are volatile. again these are all things to watch. there are legitimate questions about the economy. i would say unless you see the

economy jobless numbers which is a catch all, not very forward looking but timely kind of current pulse of the economy. unless that trends up you still have the green light for the economy. so far so good is the message. >> david, what do you like? >> right now we like sectors that show an ability to grow despite a lackluster become drop. health care, technology, and jobs and housing it ties back to this element of wage growth which has been elusive throughout the recovery. we think consumer discretionary could do very well as the labor market continues to tighten as we begin to see wages pick up. the wage growth number in last week's employment number wasn't fantastic. we're creating over 200,000 jobs a month. the unemployment rate is over 5%. it's trending lower. that will lead to some inflationary pressure. >> drug prices for a lot of different drugs up 9%, 10%.

do you think those type of price increases can continue and that's the type of reason you like health care stocks? >> it's less about the pricing power. that's an element of why we like it. it's more about the synergy between industries like health care and technologies. as we look for that catalyst that provides a spark to certain industries we think that by incorporating more -- if you knew you would have a stroke two weeks before you had a stroke, things like that could help stocks. >> what do you think about energy? >> i would reiterate what the previous guest just said, could oil hit $18 a barrel. maybe. i don't think it would stay there. it's too late to sell but we're getting to the point where it might be time to buy. maybe finding some value in things like refineries in those areas that aren't kite as sensitive. >> jim, what else? we have the big jobs report on

friday. what's the next real piece of meaty data you're looking for? >> every week is a volatile number. keep an eye on jobless claims. they are the economy wide number. as far as this week's numbers go, retail sales on friday is the big headline. i think kind of the holiday store parts, gasoline will be strong. headline is close to flat but we'll see what the details show. >> jim and david thank you both for being here. >> when we come back, ford soe mark fields and first on cnbc interview. we'll find out if there's an auto sales slow down coming down the road. >> "star wars" topping the weekend box office for the fourth straight week but there was some competition. find out which movie gave the force a run for its moving. "squawk" will be right back. hutch hutasa hutchisohutch hutan

welcome back to "squawk box" this morning. let's take a look at the futures. s&p 500 looking up about six points higher. dow looks like it will open higher by 38 points and nasdaq looking to open about 15 points higher. >> ford revving things up at the detroit auto show. phil lebeau is there and he joins us now with ceo mark fields. phil, good morning. >> reporter: behind us is the new ford fusion. mark fields ceo of ford motor

company is it tougher to sell even a new car in this market where everybody seems to be wanting an suv? >> we've had a great year even with our fusion, second year in a row we sold over 300,000 units. our retail market share in places like california, et cetera, continue to do well. it's a little tougher because folks are going more towards suvs and trucks but at the same time cars that we have are doing well. >> when we talk about trucks obviously you have to talk about the f series. best selling vehicle, 33rd year in a row. 34th. i'm close. 34th year in a row over what 800,000 in total sales. how much higher can you push that? >> we think there's growth, moderate growth. when you look at it biggest corollary with pickup sales is housing industry. housing hasn't gotten over pre-recession. before the recession was frothy

but even if you discount for that we think there's room left for full size pickups. >> the new lincoln continental. it is part of the evolution of what's happening with lincoln. are you comfortable that you're starting to turn the corner with lincoln? obviously not where you want it to be but it's no longer on death's door step. >> we have a lot of momentum. we said this is a journey. this will take years. clearly a lot of momentum. our sales are up 17% worldwide. our launch in china is going well. we sold over 100,000 units here in the u.s. and we're using this show to introduce the lincoln continental which sets the standard of quiet luxury. >> becky has a question for you. >> i know that sales have been strong. last week we spoke with mike jackson from auto nation and he said getting those sales weren't as easy as they had been in previous months and in previous years. that you had to rely on heavy sales not only from the

manufacturer but also from the dealer. as a result he said it eroded margins. they were down 10% from auto nation. how healthy do you think the consumer is at this point. >> is the consumer is pretty healthy. our incentive levels are essentially flat with last year in our transaction prices. consumers are seeing value. we're seeing more pressure on the car side of the business and the suv and truck side, but standing back when you look at the economy. when you look at the recent employment report last week and wage growth and also at the same time low interest rates and low energy prices we think that will don't fuel good power in consumer spending. >> one last question. we talked about car sharing. you said something before we went on the air that you think is interesting. what's your ultimate vision for car sharing? >> we're thinking about smart mobility as a company. part of when you think about car

sharing and ride sharing, we're doing a number of experiments. i think down the road we would like to integrate with customers lives where when it comes to either buying a car or saying hey i want to take that ride sharing service or whatever, let's take the ford. and use it almost interchangeably. >> similar to how people say i want a kleenex. they don't say i want a tissue. >> whether they want to own a vehicle or have access to it because it gives them a great customer experience. >> mark fields in front of the new fusion. guys don't forget coming up in the next hour we'll be talking with nissan ceo carlos ghosn and we got more coming to you from the detroit auto show. >> phil, ask mark, is mcconaghey

going to go more for lincoln? you don't like him. >> i do. >> i bought it because of him. >> you're a big fan. >> i am. anyway coming up looking for a little bit of luck. wednesday night might be your next chance. details on next big powerball drawing are next. check out the price of oil at this hour, which is not there. that's actually the futures. they are up about 37 or so on the dow. there's oil. that's got a little bit better, 1.5% at 32.66. we can help guide your retirement savings. for over 75 years, investors have relied on our disciplined approach to find long term value. so wherever your retirement journey takes you, we can help you reach your goals.

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in a story you won't see on the local news station you'll have another chance to be the lucky winner of the billion dollar powerball lottery. the estimated -- is that happening now? >> haven't heard? >> i'm buying. >> $1.3 billion jackpot is the world's largest in history. no one matched numbers from saturday's night drawing.

the next drawing will be wednesday night, since november 4th lottery officials say the powerball jackpot has soared from its starting points of $40 million. >> my wife asked what a good question. how do they know what it will be -- >> they have projections. >> you'll see the projections were changing pretty rapidly before this last one. >> they keep getting higher and higher. so we'll be buying. i'm not sharing when i win. >> you're taunting him. >> i know. >> that's okay. >> confirming. we know about this. the local news, you watch it. >> yes. it's great. >> come on. everybody has to have a dream. >> 10 trillion. buried out in new york somewhere. >> i want to outsmart for everybody. i'm going the mega millions tickets.

your odds are better there. >> "star wars" is breaking records around the world. now adding china to the list. "the force awakens" taking in an estimated $53 million over the weekend in china lifting its global total to $1.7 billion. on friday "the revenant" was the first movie to unseat "star wars". "star wars" did take the overall weekend box office title, though and again is the fourth week in a row for that. >> he's pretending to be the bear? >> that wasn't funny. >> he said the "f" word a couple of times? >> couldn't hear. >> was he with neal? >> no. went up with -- >> he was up with somebody else. >> did you see the little gift when lady gaga walked by leo.

>> leo -- >> it was like high school. >> i don't think leo was making fun much her. i think he was pointing at somebody else -- >> then she bumped him and his eyes went like this. >> to me it was like high school. kind of like mean. >> i'm going to give him the more sympathic view. >> i understand what he means. she wears. right there. >> but that's because -- >> he's looking right at her. >> he's pointing like yikes. >> she usually wears raw meat. 's ancient. she's 29. >> i thought it was mean. >> i thought so too. >> but then again if you were there and they took every expression -- think about that. that's like the "star wars" cafe. people at that thing too.

>> talking at the table across him and got caught -- >> the only reason i thought is so many people in the room were not clapping which i thought was rude. >> her first attempt at acting and this crazy publicity seeking singer. they all have been perfecting their craft for years and years and their souls are poured into the scripts that they people peoplememorized. >> it's never been unclogged. explains a lot. even after i got married. still clogged. >> coming up, we got a lot more on china this morning, slow down over there. at home we have a china tech pool.

find out how he's feeling about the situation. arkansas governor, mr. hutchinson will join us. take a look at u.s. equity futures.

. welcome back to "squawk box" here on cnbc. first in business worldwide. among the stories that are front and center this morning, general motors will go to trial today in the first of six cases this year involving faulty ignition switches. gm recalled millions of vehicles in 2014 because of that switch problem. it's already agreed to about $2 billion in penalties and settlement. arch coal filed a structuring agreement. and china's economic slow down could end later this year. according to a new report by the organization for economic

cooperation and development. the organization also says that its indicators point to a continued slow down in the united states. >> let's talk china right now. more optimistic projections aside, sharp volatility and string of soft economic data fueling fears of a major showdown or slow down, combination of both in the world's second largest economy. joining us now is director of global research. is the idea of how connected do you think the stock market in china really is to the economy in china which is to say we keep looking at these terrible overnight numbers and saying oh, goodness we have a problem here but then you look at consumer numbers and other numbers and you think real economy may be disconnected. >> well, actually if you look at history the chinese stock market actually are pretty connected with the real economy. if you recall the big boom in the stock market actually was

2004, 2005 that led the beginning of the chinese economic boom. i would say it is not a very accurate indicator but it's nonetheless a reasonably good indicator for the economy. >> given the steps we've seen the government take in the last week or two weeks and go back and think what they did over the summer how do you as an investor even begin to think about all this? >> well, i think the problem here is this. i think the market is very much concerned about the chinese government is pressing the wrong policy button at the wrong time. let me explain what i mean by this. if you look at the chinese economy the problem is very obvious. it's a gross inadequate aggregate demand. we have falling prices. major fallout in capital investment. the economy has slowed. output is decelerating. it's a demand problem. yet the china government keeps

telling people that they are not going to be increasing policy support as much as market has been anticipating. that is a problem. on top of that, the new year the government basically is saying they will do supply side restructuring. i'm all for supply side restructuring. but the problem is if you don't provided equate policy support at the same time you want to eliminate a lot of over capacities, don't forget the supply side reform is always income and price destructive at the very beginning. that's why i think the market is very, very spooked by that. >> what do you think the real growth rate is in china? >> i would say 6%, 6.5%, in that area. if you look at all the major indicators, no matter whether it's a fixed asset, pmi, just pick a number they are pretty much consistent with what we had at the height of the global

crisis which was 2008-2009. at the time the chinese economy in real terms about 6.5%. around that period 5.5. if you look today we're not far off from 5%, 5.5% because of price deflation there. >> if you're an investor sitting here in the united states thinking should i be in the chinese market and if i could be, where would i be, you would tell them what? >> well, today i would say probably chinese stock market, if you look at the chinese asia market, i think is still very frothy. it's not a good place to be. but if you look at the chinese h share market which are the chinese companies listed and traded in hong kong, we're talk about ratios that are single digits. if you look at pe ratios they are trading lower than the greek banks and greek stock market at

the height of the greek crisis and i think in no way that the chinese economy is in the same danger. chinese economy will slow. profit will be problematic. i don't think the chinese economy is facing systemic risk. i think the chinese share prices after this recent sell off is probably a good buy. >> okay. we will leave the conversation there. we appreciate it very much. got a little bit of maybe that's a sign from above that -- we appreciate it. here it is. we're going to go to break right about now. we'll come back in just a moment with the governor and maybe a fire drill. we'll see. back in a moment. woah!

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i'm afraid so. now go churn us some butter, boy, and then make your own clothes. yes, sir. (vo) don't be a settler. get rid of cable and upgrade to directv. call 1-800-directv. . welcome back to "squawk box" this morning. futures are look up this morning. dow looking like it would open about 35 points higher. a big headline for you this morning, talking about this deal coming together for quite sometime. it's official. shier will give shareholders $18 in cash. you might recall shier made that

offer earlier. it was rebuck kbukerebuked. it looks at a 37.5% unaffected premium based on when the announcement was made the initial offer -- >> back in august 3rd. >> we were concerned about slow down and whether next year could see a recession. we're joined by governor asa hutchinson. couple of things, governor. whose steps -- whose foot steps are you trying to follow in? >> i'm trying to create my own

foot steps. >> one of the reasons you're ringing the bell you're outspoken in your efforts to make arkansas more business friendly and attract businesslike so many governors from so many different states are doing. when you it's, obviously, taxation is one thing but computer coding is high on the list for you. >> absolutely. we lead the nation right now in computer science education which is coding in the classrooms. i campaigned on this. we accomplished this. we mandated that computer coding be taught in every high school in arkansas. every public school in arkansas. we've had over a 300% increase in students that are taking computer coding. and the largest increase are among females and minorities. so it's a very dramatic change and this is fueling the microhubs of technology we want to develop in arkansas. it's creating incredible job

opportunities for the young people. a lot of excitement around it. and it's nice to be recognized by "wired" magazine and cnbc about the success of our computer coding effort. >> the results that you've seen so far, have any tech companies said wow the workforce will be better educated than in other parts of the country. has that happened? >> you certainly see companies expanding and that's -- we got our own tech hubs there in arkansas with walmart which is one of the leading technology companies. you got dillard's but axion which is a data management company in arkansas. then we got start up companies that are doing very well, metoba which expanded to add over 100 new jobs this year in the technology field. you've got j.b. hunt that's adding to its workforce in the transportation sector. we have a very diversified economy in arkansas and the

coding effort really helps us to retain those companies, provide the work forks but also send a signal to silicon valley that if you want to have cost competitive prices with coding skills you better look to mid-america. >> what's the income tax rate -- >> too high. but we're lowering it. >> is the legislature republican or democrat? >> it's republican legislature and when he the largest income tax reduction in arkansas history, $100 million reduction which lowers the rate stwargt t -- starting with the middle income. went to competitive with our tax rates. we are. >> how are the liabilities with the government pension plans, et cetera, et cetera, right now? >> we got a good history in arkansas of financial stability. we got a revenue stabilization act that keeps us from overspending. so we haven't run into problems

like other states. we maintained a balanced budget. we have to do that under the law. our pension funds are solid. and so we're really in good shape. >> what's the income rate tax, you said too high. 1234507%. >> yikes. >> we lowered to it 6.9% for across the board but for lower income -- >> what would you like to get it too. >> i would like to get down 5%. that would be competitive with our surrounding states. we have lower taxes in other areas including property taxes. >> florida. >> tennessee is zero. you know, we got to be competitive. >> those aren't dry counties either. >> arkansas has got enough wet counties. you'll have a good time. >> governor, let me ask you. you prepared two budgets for this next year. one that takes into account

medicaid expansion and one doesn't. that's a difficult position that puts you in. >> we got a challenge. arkansas is one of those states that accepted the medicaid expansion. we call at any time private option where we utilize private market systems, private insurance for the medicaid expansion population. that's something i inherited. we've continued it. we got 200,000 on there. we're trying to change it into arkansas works which is what i call it adding incentives to work, more employer-based insurance requirement, more personal responsibility requirements in there with the medicaid expansion population. we got to be able to save money in term of the entire medicaid budget. but we'll get through this. arkansas is a unique state and we'll find a unique arkansas solution for that. >> you worked with the u.s. homeland security department, right, as well? >> i did. >> should we feel safe?

>> we should feel safe. we should, those be very concerned about the threat. i like the attitude of the american public that you go about doing your business. you don't -- you're not held hostage by the threat of terrorism but you also have to invest in law enforcement, our intelligence community, to properly respond because it's a real threat. i'm delighted, though, that we're able to continue to grow our economy in arkansas, rebound from the recession, despite the constant concern about terrorism globally, and, you know, our national leaders looking forward the president's state of the union address tomorrow to see what his strategic plan is and i hope the president spend for time on the strategy against terrorism versus strategy against firearms. >> do you have a top three republican hopeful presidential -- i won't ask you for one because you'll say no. how about your top three?

>> that's a good question. of course mike huckabee back a home town favorite would be on that list but you also look at rubio and cruz are running strong in arkansas. and we have a march 1 primary so we're part of the sec primary on march 1 and for a long time everybody thought that this would be wrapped up before then. it's going to continue to march 1 and a little bit beyond that but arkansas should have a voice to express because we're part of that march 1 primary. should be very exciting. >> governor huckabee has to do well in iowa or he's out. >> he has to do well in iowa. chris christie is somebody to watch in new hampshire as well. he's moved up some and he's campaigned in arkansas. so i'm close to him as a former federal prosecutor. so there's a lot to watch in this race. i think if you -- when you come out of new hampshire, you know that cruz will be in the mix. you know that trump will be in the mix. rubio is in the mix.

the question is, is whether jeb bush, john kasich or chris christie will catch that next wave. >> former governor candidate, yeah, they are all vying. i don't know. there's a thought sooner or later you settle on an establishment governor as the nominee. >> i can mention one thing about china for a second? >> yes. >> because china is a big topic, course. i came back from china less than two months ago, incredible trip over there promoting arkansas. but despite the challenges in china i'm delighted two arkansas companies, walmart and tyson's continues to invest there. over 100 stores are planned to expand in china with walmart. tyson's invested over $20 million in one province to expand poultry processing there. so i think despite the nervousness, we got maintain our commitment network with that economy and i'm glad arkansas

companies don't look at that market. >> do you think close contact with officials at walmart or at tyson's -- >> sure. >> walmart is struggling some over the last year. what have you heard? does it have any impact on the seat? >> no. in fact they had some right sizes of their executive employees. that had no economic impact. it's still a very dynamic economy. i'm very encouraged by their global view of what they are doing in china. i have a lot of confidence in their leadership there. so it's strong and it's been a positive impact on arkansas's economy. >> did you see what you had to do. i had to wield the gavel to close the stock market.

>> i've been doing exercises. >> good. >> i went in trading. >> it's all what happens after you ring the bell. >> at least you weren't ringing it last week. anyway, governor, thank you. >> when we come back, it is the backdrop for some of the wildest parties and now you have a chance to own it. the playboy mansion is up for sale. we have the details after the break. in the next hour we'll head back to the detroit auto show and hear from carlos ghosn. "squawk box" will be right back.

time for sports news. first week of the nfl playoffs is in the books and it was a wild finish in minnesota yesterday. the vikings trailing the seattle seahawks by one point with less than 30 seconds to go. i don't know what. this makes up to pete carroll. walsh attempting a 27 yard field goal. it wasn't even close. a chip shot. seattle seahawks went on to win 10-9. earlier in the game same thing happen happened. it got under. didn't matter. this time it freaks out a kicker

supposedly. then in the late game, you did saw how good aaron rodgers is. washington much improved. they looked really good. i wish we had -- do we have the catch of the tight end from washington one of the greatest catches. almost an odell beckham catch. the ball was headed into the packers right into him and -- do we have it or we don't? you should have had it. the green bay packers -- look aaron rodgers was smiling, beat the washington redskins 35-18. i won't mention the bungles. i won't say i told you so or anything. you want to see someone self destruct under any circumstances watch the bengals game. some great parties are up for sale but a few strings attached and we're not talking g-strings. it was run down 25 years ago. >> really >> terrible.

like old -- what were the really old stereo systems with the big knobs. >> hi-fi system. >> the playboy mansion listed this morning for $200 million. it's ownby playboy enterprises by rented by hugh hefner. it is 22,000 square feet, wine cellar, a game room with mirrors and mattress floor designed to look like a 1970s van. a tennis court, large pool with cave-like grotto. hefner bought the home for $1.05 million which at that time was a record. now hugh hefner is a minority

shareholder in playboy enterprises and he rents the living war for about a million a year. this is a living estate. any buyer has to allow the 89-year-old hefner to live there until his death. >> his master bedroom is off limits. >> correct. >> adjacent to l.a. south country club. >> right. exactly. >> and you can hear some stuff. when i was there no one there was. i go i got a tour because my friend bought a share of stock. >> it needs work. >> people say it will go 80 to 90 million. >> hard to believe. it's six acres. knock it down it's worth. >> in that golden triangle.

it's possible. faits tear down more like 6070s. >> right up the street from aaron spelling's hotel type thing that he bought as well. but it's prime, prime, prime real estate. >> so pretty from the outside. >> yeah. >> the question is whether some buyer will attach some premium to it because it's this legendary fable or -- >> a lot of cleaning required. >> remember when hef had that tv show that was on late at night. it was so lame. >> a lot of smoking. >> yeah. sad he's going to live there. >> it's terrible. you know to think about all those things. >> his wife is 29.

>> zhoen gshe done get to stay ? >> no. >> he's only been married three or four times. the list of partners very long. he's not been married that many times. >> when we come back --

>> china, the fed and earning season all expected to keep the markets on edge. >> all roads lead to the motor city. detroit is the center of the automotive universe for the next couple of weeks. carlos ghosn and gm president talk to box first. >> dropping into the teens. not the weather but twitter shares. will jack dorsey's turn around plan to get investors excited about the stock again. "squawk box" begins right now. ♪ >> announcer: live from the most powerful city in the world, new york. this is "squawk box". welcome back to box here on cnbc first in business worldwide. i'm joe kernen along with becky quick and andrew ross sorkin. less than 90 minutes away from

the opening bell on wall street and futures are at least positive in spite of the big drop again in china today. checking out the markets in europe at this hour, most were a little bit higher early on, they moved into the red and then moved back into the green. we'll take a quick look -- the boards are frozen. they were up fractionally at one point after being down after being up. >> we'll talk about deals. this deal took some time. baxalta has agreed to be acquired by shire for $32 million. shire first made that offer back in august. the company said the deal should add to shire's value. let's tell you about a few of the other stories investors will be talking about this morning. macy coming under pressure

from an activist. star board is urging the retailer to strike real estate deals. the activist investor things macy's stock could trade as high as $70. "wall street journal" reports that kohl's is exploring taking itself private or breaking up the company. shares of the retailer are down 40% from its peak back in early april. alcoa won a contract from general electric aviation unit. uber is cutting prices to more u.s. and canadian cities in an order to boost rides. the size of the discount depends on the city. is this third straight year uber cut prices in january.

those drivers are unhappy because there's no contract between them they just get told. >> this is how much you take for the ride. you'll get more rides because of this. >> the auto world centered in detroit for the next couple of weeks. phil lebeau joins us right now with a special guest. >> reporter: i am joined by the chairman and ceo of renauflt nissc -- renault-nissan. tell me about the q60. >> it's our new coupe. it will come with a v6 three cylinder twin turbo. up to 400 horsepower. everything we know is in this car. >> reporter: starts this summer. infinity had a fantastic year last year.

where is that demand coming from luxury. your taking it from other brands. >> the market is growing. the growth of the market has been strong in the u.s., has been strong also in china even though they have been up and down. there's demand for a premium car and it's gaining market share. so there's a kind of double digit growth. >> reporter: that brings up the question what happens with incentives and there's a lot of concerns that are out there that we're starting to see automakers say i need to get share because the market won't grow as much as it has in the past. are you worried we're starting to see incentive wars bubbling up? >> i don't think there's anything extraordinary taking place. we know this market. we've been in this market for a long time. i don't think we're in an exceptionally tough market in terms of incentives. there's a lot of gains taking place in the market. i would say it's business as usual. >> reporter: are those gains

going to hurt profitability? >> i don't think so. most of the carmakers are coming with a lot of productivity gains, also scale helps reduce a lot of cost. when you put a little bit of incentive it means that you're very strong. >> reporter: we talked about this last week when we were with you in sunnyvale. let's talk about china. is there a split between what we're seeing in the china stock market and what you're seeing with the chinese consumer. >> yes there's a split. you have a lot of volatility on the stock market. at the same time, it's been a heck technical year with china, a lot of ups and downs. tend of the day the china market grew by 5%. china is growing 5%. everybody is extremely happy in the united states. not so much a big difference.

i still think this will be a year of growth in china but we won't have a very easy, soft thing taking place. we'll have up and down also. >> the consumer in china, you're still optimistic. >> consumer is fine. phil, 100 cars for 100,000 residents. 750 cars for 1,000 residents in the united states. you have long term growth. you may have short term adjustments, short term turbulence. >> reporter: carlos ghosn, chairman and ceo of renault-nissan. giving us a corner of the q 60. we'll see it all later. >> yeah. >> 31st annual jpmorgan health care conference gets under way in san francisco today. good early morning to you, meg. >> reporter: we're getting some news this morning the

shire/baxalta deal. $32 million as expected. premium of about 38% to baxalta unaffected share price back in august when these deal announcements started to take place. people receiving that positively. everything here is expected. this is a conference known for deal make. it's been flowing out over the weekend and accelerating this morning. another big piece of news coming from lumina announcing the formation avenue company to develop a blood test for cancers before they become symptomatic. they are calling it grail as the holy grail in detecting cancer early. they will begin clinical trials next year with tests coming in 2019. some elm are spencle this technology will evolve that

quickly. and vortex putting out guidance coming down a little bit in the pre-market trade as their cystic fibrosis projections missed expectations but we're expecting a lot of news. we'll have the ceo of shire on tomorrow talk about their deal with baxalta. our first interview coming up this morning is at 10:00 a.m. >> meg, thank you. folks if you're just waking up there was some news out overnight. legendary singer david bowie passing away after an 18 month battle with cancer. bowie just released his 25th album on january 8th. also his birthday. he was inducted to the rock and roll hall of fame back in 1996. up next the fall out after the jobs report and the great wall of worry. we'll check out the fear factor

hanging over nabts. mexican drug kingpin el chapo is back in custody after being on the run for months. why did actor sean penn secretly meet him in a jungle hideaway? that story is coming up. big things. small things. spur of the moment things. changes you'll notice. wherever you are in the world. sheraton.

>> welcome back. the market setting up the second week of the new year with a number of fear factors. china, oil and the beginnings of earning season having some potential hazards. david blitzer the managing directover s&p and dow jones indices. gentlemen good to see both of you. david, let's talk about where the dow and s&p stand right now. you say that even at these valuations, even after the selloff you still think things are a little rich. >> yes, pe ratio, 16, 17 times. everybody feels bearish, especially after last week. and everybody is nervous. i don't see why this should be the bottom. i don't think the bottom is thousands of feet below. all we did, we get more and more worried last week. finally said ah-ha it's over. now we're hoping for earnings

and people seem pessimistic about earnings. >> at the same time we looked at the selloff overnight in china and so far that hasn't spread here. >> europe was up at 7:00 this morning when i peeked. china looked like it looked all last week. they didn't have a circuit breaker today. but it looked pretty bad. >> why do you think it didn't spread. we waking up to a new week. we're reassessing how important china is to us? >> i think we all overstated the impact of china in a accumulate of ways. the currency, everybody compares currencies against u.s. dollar and china looks very weak. it's about flat with tuche uk.se and australia. china's markets have far less investors and far less experienced investors that grit their teeth and sit still in these kind of events compared to the u.s.

but there's no good news out of china at this point. >> we got some good news when it came to the jobs reports here on friday. some people took a look at that and said look this is because of a massive seasonal adjustment. without that we would be looking at a gain of 11,000 jobs. >> there's a reason seasonal adjustments happen. i would say that if you're looking to kind of make that number or that report weak you're stretching things. there are good job gains when you adjust for the fact that there's retail hiring and firing around the holidays. which you should adjust for. you know, i think the bigger problem with the economy is you're going to get reports like the payroll report which will tell you everything is all fine but what problem is as we go forward there's not a consistent pattern of good economic reports that are going to tell people not to worry about china. if you want to worry about china, you want to worry about china last week, you can worry about china this week and the week after and there's no compelling evidence that's just sign your face that you can't

ignore it to put you in a different light. >> why not? >> in part because we're growing at kind of 2% to 3% and q4 gdp won't look that way, q1 gdp won't look that way but pretty much that's tanch. when you have an average you'll have some things that are below average and some things that look weak. the problem is that those come at odd times and erratic times and you don't get the pattern laid out that gives people confidence. >> on top of it, i think what people think more than anything else is a lot of change right now. a few weeks ago we thought china settled down. surprise it didn't. three weeks or two weeks ago we thought oil had hit bottom. we cut another five bucks off of it. we thought we would have low interest rates forever. fed raised it and tell us they will do it two or three, four

more times next week. the financial world is swamped with too much change. the north koreans woke up and had a nuclear bomb and saudis and iranians didn't like each other. huge amount of churning and change and at some point somebody will take a deep breath and buying stock after coming off the worst opening week in six years. you got to be a dedicated optimist to do that. >> worst opening week ever in six years, did you say? >> worst opening ever. that's two more reasons. >> throwing out these numbers, six years. worst ever. >> all right. i won't argue with that. >> but investors look at these things and you would tell people that you feel better about things at this point? >> i don't feel better about things. people who don't feel worse are the ones who didn't do anything last week.

but that's not a good way to get an economy up. >> i look back what happened in august. if you bought at those lows you were doing the right thing. based on where the markets went afterwards. you can't ever call a bottom, they don't ring a bell at any of they things. but you worry that there are additional concerns to come from oil or additional concerns to come from china or it's the unknown that has you more sfwheerd it's abo. >> it's all about horizons. it becomes the norm if it stays or it fades. this is why people tell individual investors,000 invest they tell you you can invest for the next week you have to invest for the next ten years. over a ten year period things wash out. ten years from now we might remember the opening week but we won't remember what caused it. hey remember back in 2016 that opening week was really bad. >> depends. depends on what happens here.

>> what are the odds you'll have that -- >> i don't know. you saw that jobs report. you saw the other stuff. >> nothing wrong with that jobs report. >> even though seasonally adjusted. >> if you didn't have seasonal adjusted data you would have more economists on your show. >> did you see the controversy of only 11,000 jobs created. you didn't see that david stockman? >> i don't even need to see it. i heard the argument a hundred times. there's a reason use seasonally adjust thing. it's called christmas. weather you can dig through the details. >> assuming it's really cold. >> they added the jobs back in assuming people got hired for christmas. >> then firing. hiring and firing. you can see the number of people who are not at work due to bad weather. another thing too. on the east coast we had unusually warm weather. other areas had flooding, they

had problems so we actually see people who say they were not at work due to the weather was about normal and for people in new york that's hard to fathom, how can that be? we had such great weather. in other parts of the country where other people live -- i know we all think everybody i was in new york, but where other people live they had trouble getting to work because the road was flooded out. >> i wouldn't argue about seasonally adjustment. they have done it for a long time. they do a better job of that than a whole lot of other statistical things. >> plenty of reason to look at it with one eyebrow raise when we do 1% this quarter gdp. >> ten year factor -- >> maybe they are not working. maybe the participation rate is at a historic low. >> i would question gdp. >> you think gdp is higher.

>> i think gdp has problems. >> why can't the ten year get above 210, 215 and talking about the fed not -- >> people think there will never be inflation again. vast majority of people who deal with inflation, look at inflation haven't seen it. >> it doesn't feel like a 4.9 -- is it 9? under 5%. >> takes a while to find somebody good. >> that has training. >> that's the point. >> nobody takes an engineering course except in arkansas. >> that's the entire point. you fine it much more difficult to hire people. you have to start bidding up the salary. that says more about the economy than gdp and more about the economy than allegations of misplaced seasonal adjustment. so, you know, i think before i plot all numbers i dig in.

>> there's structural stagnation that's come up. it's alive and well but will fade over time. evidence just isn't there for structural stagnation. >> the atlanta fed is sub 1% and others. what do you think the number will be? >> it's not going to be good but i question whether gdp is what we should be looking at. >> it's set up for another repeat of these disappointing years. >> if you're trying to get a job seems like a pretty good year. i'll take the jobs over growth. >> we don't eat gdp that's the difference. people get hired, they spend their money and they do get to eat. >> great mood in the country. 80% think that they are headed in the wrong direction. >> thank you, gentlemen. >> when we come back, probably one of the most bizarre stories of the weekend actor sean penn meeting with drug lord el chapo while he was on the run.

did this meeting lead to his arrest on friday. we'll talk about that and more when we return.

. welcome back to "squawk box" this morning. futures are looking up on this monday. dow looks like it will open higher about 80 points higher. nasdaq up by 27 points and s&p 500 up by 12 points. other big story over the

weekend, a little by zarks mexican drug lord el chapo back in custody after a shootout on friday but the most bizarre part of the story of the capture he recently met with actor sean penn. penn interviewed el chapo back in october for an article he was writing for "rolling stone" magazine. the seven hour interview took place in a mountainous mexican jungle. el chapo broke out of prison in july through a tunnel under the prison. i think it was in his home. his second prison break by the way he was captured friday in a bloody shoot out. the meeting with sean penn was set up by a mexican actress. do you know her, by the way? i don't know this actress. the drug lord wanted to help her in brokering a movie about his life. >> the tunnel was a mile long. >> had a motorcycle under it. >> how do you dig a tunnel a

mile long. >> cost a million dollars. he admitted in the interview and he was drug lord, he had yachts and planes. >> how many of the prison guards and mexican police do you have to dig the tunnel. all right let's bring it in here. >> he had to buy a plane -- >> police escort. >> not a police escort but jamming devices and he thought that the police knew. also, now mexican police and i think perhaps the fbi in the united states suggests that they knew sean penn was actually going to do that interview. they were monitoring all this as it was taking place. >> did it lead in part -- >> that's the question. >> of the capture. >> of how it worked. there was a secret meeting with saen p sean penn. they put the story up on the website. waiting for the magazine -- the magazine comes out in two weeks.

>> more interesting is he back with madonna? >> i don't know. >> they had a nice piece about im. >> there's a piece in the "post" they are back together. >> what about the former -- >> it's got ghosting. >> you know about that? >> unable -- you have no address, no e-mail. can you imagine spending too much time with that guy. you would be like i got to get out of here. get all temp mail address, all twitter n-is agram and everything. coming up we'll head back to detroit. nine inches taller, gm president dan amman will tell us what's up next for the automaker.

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welcome back. here's what's making headlines at this hour. wells fargo upgraded to buy. the bank is sell positioned to

deal with a variety of potential negative factors. at the same time goldman is downgrading jpmorgan to neutral from buy. firm citing outperformance. and gasoline prices falling by a penny during the last three weeks. the nationwide average for a gallon of regular unleaded at $2.05. >> some tesla vehicles can now park themselves without a driver inside. a new software update was beamed to some customers over the weekend. it puts new speed limits on its auto pilot mode and improves the car ace ability to stay in the lane. ceo elan musk say his goal is to let drivers summon their self driving cars self charging cars from anywhere using their phones. a lot of auto news out today in part because of the detroit show kicking off. phil lebeau joins us now with another special guest.

phil. >> reporter: thank you. i'm joined by president of general motors, and the crowd behind sue looking at the volt. we'll talk about that in a bit. i want to start off with what we're seeing in china. the markets are volatile. it brings up this question what's the economy of china look like? what is general motors seeing? >> last year, 2015, we posted another year of record sales. our sales were up just over 5% relative to 2014. 3.7 million vehicles we sold in china last year. it underscores the strength of the chinese consumer. real economy is still in dean shape. obviously growth slower than it had been in the past. still the world's largest market force and still growing. >> yet there are a lot of people who are skittish about china not just because of the stock market there's a concern sort of a top has been reached at least in the near term. you're not seeing that in the underlying fundamentals?

>> it seems to be any time you have an economy as big as china, growing as fast as it's been growing, some imbalances will develop in some places and we're getting back to a much more maturing growth rate. >> let's talk about the volt. you believe it has cracked the code the mass market wanting an electric vehicle. range in price? >> very simple thing. 200 miles of range for 30,000 miles. when you put that equation in front of people. this makes it available for everybody. we have a unique proposition. >> people will say with gas under $2 a gallon it will be tough to convince them to spend $30,000 even with the government incentive on a ln electric vehicle. >> based on the feedback we've gotten, we feel very good about consumer acceptance. it's a very high level. >> you made the announcement

with lyft. gm take a stake in lyft. the bolt is at the heart of that in terms of developing the ride share culture out there. how much growth do you see? >> we think ride share will be very big pup see that in the growth rates already, explosive birth and at the same time we feel it's at the beginning. we see a big opportunity in the short term for vehicles like bolt to be brought into the ride sharing free-throw shooter. and more importantly in the long term we see a convergence between autonomous and ride share on the other hand. >> final question on the bolt. do you still need the federal government incentive to spark that demand? >> $30,000 after neff and 200 mile vaeng compelling price range. >> dan ammann joining us on a big day where they are introducing the chevy bolt here in detroit at the north american auto show. coming up on power lynch, jim

lentz from toyota. >> we'll be watching. the economic reports really pick up on wednesday when we get the fed's beig ebook and on thursday weekly jobless claims and december import price and earning season kicks off with jpmorgan before the bell and american express and intel. on friday we get december retail sales and the producer price index. >> there you go again. >> along with a trio of bank earns. citigroup, morgan stanley and wells fargo. >> stocks in china falling a four year lows late in today's session. shanghai composite fell 5%. shenzhen fell 5.5%. nikkei is closed for a holiday. europe back positive. as you saw last time we looked at our futures we were at the

best levels of the session up about 80 points. willford frost of "worldwide exchange" joins us on set to talk about international markets. what happened, anything with the yuan earlier today? i figured threw a lot of money to keep it down at 5%. >> the yuan the last two sessions strengthened. they stepped back in and prevented it from falling and that's helped prevent this contagion as you "today" recorded with to the stock market the circuit breakers were abandoned on friday. there was a lot of state buying. finishing down 5%. if we look at last week as a whole, big surprise in terms of what they allowed to happen in the yuan but massive surprise how much that affected global markets. we pull out the dax and look at a chart since the start of last year, up 9% last year, down 6.5% last week. giving up all of the gains from the start of the year before. we had qe in ju erce in europe .

when you step back and think what's caused that the last five or six years investors have been reassured by the idea central bank is king and will step in to prop things up. the ecb is not king. it's a port-au-prinauper at wor. >> kind of interesting to separate the chinese markets from chinese economy and figure out the impact from each. >> that's a very important point. i'm been fairly bearish in the last year or so when i talk about china. in that run up when we hit the peek in june of last year for the chinese asia market that wasn't correlated with the fundamentals. thus when the shanghai market comes down doesn't necessarily imply the economy will come down.

the spark of last week was the currency and i think the fact that, again, over the weekend we didn't get any more clarity of what they are trying to achieve so they didn't tie them stoefls any predictions makes you think they can't make a firm prediction and they have lost some control. to put a bullish argument on china we got a chart of what the currency has done on a trade weighted basis. since the start of last year right through august's concerns, january's concerns, you can see the final quarter of that chart relatively flat on a trade weighted basis the yuan. if the chinese authorities are targeting, they haven't been letting it slip. there are other point of view on that. tinting thing for markets today, again, china down 5% but today european markets shrugging that off and u.s. futures shrugging that off. that initial shock from the move last week has pass snooped next ten years will be something to watch in europe. merkel is not going to -- she

cancelled -- 600 women, huge gang not some haphazard -- it wasn't a video, it was planned on social media, the whole notion of the open borders now in the eurozone people are wondering -- they are not open in certain parts. someone said there's another 10 million refugees slated to come out of the middle east to europe over the next couple of years. this is messed up, willford. >> it's a big problem. merkel is getting a lot of heat for being so open and liberal on welcoming refugees. i don't think you can overstate the important jan of angela merkel for the future of europe. i think also it's a long way to say that she might lose her grip on power, but her opinion polls since late last summer for the first time in her tenure well below 50%. she's so important to holding together her center right coalition and there's a lot of

people within her coalition who hold similar views the right wing in the uk who would even want -- if she loses that grip could it be very bad for the future. crucial to cameron's renegotiations. >> i don't know if you're right that britain stays. we'll see. the refugee-isis, just the whole linkage between that. it throws -- it's a whole new ball cart for what europe has been trying to do for the past 25 years. >> absolutely right. we knew tissues on the economic side of this experiment and the political side is really coming to the fore. it's very important that merkel is there to keep an eye. i didn't predict britain will stain. >> you want them to >> i do. it's a very complicated argument. it's going to be tight and the latest news over the weekend suggests that referendum will come this year rather than the next year. crucial one to look at. >> all right. thanks. >> coming up, dipping into the

teens and not talking about the weather, we're talking about twitter stock. can jack dorsey turn that company around. top internet analyst gives us a view of twitter next. and notices maris issa mayer pl to spend more money this year?

welcome back to "squawk box," everybody. we've been watching the futures this morning. they have been bouncing around a

little bit. they were about at the highs of the session. dow futures up by 81 points above fair value. s&p up by 10 and nasdaq up by 27. let look at the priece of crude oil. wti was down by more than 2%. after a decline of 10% last week. wti down by 23 points to 32.93. >> yahoo! spending more money. marissa mayer plans to spend $3 billion on cone tent. ceo has been under fire for recent acquisition. "new york times" running a story this morning on her and the company as well. saying some employees now call her a vita as in eevita peron. stwiert teenager. it's dropping below $20, all

time low for the social media company. this is as it tries to revamp its user growth under the ceo. shares 2k0u7b% since he took the helm of the company. here to break down all of this is bob peck the internet equity analyst at suntrust. good morning to you. >> thanks for having me. >> how does this stock actually break out if it does at all. >> the key things they need to initiate is this incentives. we upgraded to mid-20s. we were negative on some user trends. their google deal, got tweets showing up in google which will drive more traffic. two, their moments product which has been rolled out in the u.s. or brazil. >> i have not seen any advertising. >> they started to do some beta testing. >> what does that look like >> it's a promoted periscope. interesting. so you have that. you have periscope as well. you have vine as well. this should drive more traffic.

now in addition to that you also have increased monetization. they are doing retargeting. you're expanding off of what is a 300 million user base. so for a total base of 800 million. as that starts to green turn around. going towards more of a platform user system. >> how much of that is outside of the eco system and does it matter? >> it matters only with respect as far as the monetization. thesers are the ones going to twitter. not log in. that's 800 million people a month coming to twitter. what you need now for this stock to work you need to show a proof point and show users can grow again. grow from more than just a couple million per quarter getting back to double digit. as that gets bigger, more

advertisers will come. >> what's the fares price for the stock? >> $34. >> 12 months from now? >> one thing jack dorsey announced in the past week or two is this idea we'll expand beyond the iconic 140 characters. does that make sense to you >> it does. >> some people say they love it because they are frustrated by the limit other people say that the beauty of the product is the 140 characters. >> don't forget the idea behind and they haven't announced i want you can expand the content. what that would allow content from their partners. think about "new york times" article. you wouldn't need to leave twitter to go to another website. be a way to get more rich content when you click on and expand. >> not necessarily going to change the view of the feed. >> exactly right. >> we're doing a lot with embedded video. cnbc embeds video.

i have yet to see, maybe they are beta testing ads that run before or after. >> promote it and sponsor it and the content itself will be promoted. you can have a video for a dove ad and just show up. much like you have right now on facebook. so think of facebook as sort of a blueprint for what twitter will ultimately do. >> the other question i had was instagram. instagram to me looks like a modern version of what twitter is becoming. >> yep. >> do you think that's a better product? >> the interesting part, we talked to jfe consulgt and they have interesting data on twitter and instagram and overlapping usage. celebrities will post from twitter and go to instagram or vice versa. using those platforms simultaneously. we do a big sur va with survey monkey. younger kids, teens are using inis a grawl a lot. that's growing. they are not leaving twitter. they are still using twitter

which is pretty interesting. >> we have to go. yahoo!. what do you make of it? >> most likely outcome you start an active process for the sale. multiple bidders there. >> you think it has value. >> we do. because especially you cutback the extra cost, about 800 million, cutback on some extra spending, put five times multiple on that, you're talking 6 to 8 billion dollars. >> investors have it wrong. >> you're getting pounding for the holding company penalty as well as taxes on baba. you need separate the two companies, sell out the core and left with baba and yj. >> thank you. >> when we return, wall street's attention turning to jobs, from zwroerngs. fi find out what jim crime

certificate watching. dow up 60. 23 on nasdaq. we'll be right back. all acrose the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. like in the hudson valley, with world class biotech. and on long island, where great universities are creating next generation technologies. let us help grow your company's tomorrow, today at business.ny.gov serena williams. hi watson. you are a fierce competitor. i've heard that. i have analysed your biggest matches. oh really? when down a point, you serve an ace 5.8 times more than other top players. you sound like a coach. i am not. but i can customize training programs based on biomarker data. watson, that's pretty impressive. you might say i am the serena williams of cloud-based cognitive systems. nah, i wouldn't go that far.

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welcome back. we told you earlier about the

letter that starboard sent to macy's. macy's is responding to that call to strike real estate deals. it said viewpoints expressed by starboard are already felt by macy's. >> let's go down to jim cramer at the new york stock exchange. do you think we are oversold? if we do get a bounce s it today? do we end up in positive territory, or does this fail and we get a slow, sickening slide into double digits again. >> we came out at minus 5 on friday. we have been down to minus 8 or 10 in the last couple of years. i would have liked to have seen china up, oil up, commodities up, copper up, dollar down.

you have to have some reason other than europe is looking better. i think this market is guilty until proven innocent. those who want to catch a bottom are fine. all the factors are what caused the market to go up, and we don't have any of them. i think you have to be careful. these monday openings have often produced another better time to get in, if you want to wait. >> which reports are most important for you this week, earnings reports? >> i think these bank stocks. it's interesting, we got a call from goldman this morning, downgraded jpmorgan and upgraded wells fargo. keep in sight that when interest rates did not go up and we feel like the economy is not that strong, so the fed can't raise that much, bank stocks were orphaned. could happen again. >> do you -- what is your feeling on tom coughlin? >> i hope he goes to the eagles. this is a guy who won two super bowls, has a remarkable ability

to pulling a rabbit out of a hat. >> i love him. you know, you can't go out and play for your players, right? but there were a couple of those games this year, i see why it happened. those two super bowls, no one thought that would happen. >> yeah. with very little. he's a respected coach. he's a coach -- i was telling my wife, i will go to training camp for a week if i can meet that man. he's so -- such an intelligent, good guy. >> i think we have one quick catch to show. they don't have the one i wanted. from the front it was more incredible. did you see the jordan reid catch here? >> yeah, without a doubt, that's a beckham catch. if we see defense from the redskins, it would be something. i think they were playing with ten minute. they lined up ten men sometimes. >> but the great teams, the ones that -- the best ones are the ones that -- green bay looked

unbelievable, did they not? probably won at kansas city, won at seattle. the way it turned out, these are the teams that need to play to get to whoever is best, right? and pittsburgh. >> if maclin is okay. kansas city can go deep. >> how about ben? a guy, knee in his shoulder, he says i'm leer here do this. >> he can't be stopped. >> good to see you. up next, out of the super bowl indicators proving to be accurate when predicting how the markets will end the year. we'll check out the winning streak next on "squawk box." 32 years at this place and now

i've got 9 days left before retirement. we've been planning for this for a long time and we'll keep evolving things. so don't worry. knowing you is how edward jones makes sense of investing.

it's time to dust off the super bowl stock indicator, that indicator is on a seven-year winning streak. it's been right 82% of a team if a team with origins in the original national football league wins the super bowl, the stock market goes up. if the team with the roots in the old american football league wins, the stock market goes down if it was created since the 1972

merger, if that one wins, the current conference is used as the current indicator. >> what was carolina? do you know? what the hell are they. >> we're out of time. >> nfc now. >> join us tomorrow. right now, time for "squawk on the street." ♪ >> remembering david bowie this morning, dead at the age of 69. what a loss. good monday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer and david faber. we set the table on a busy week, earnings season unofficially kicking off. alcoa tonight, futures with a modest gain after the dow loses 1100 points last week. europe's hanging on to gains at the open despite shanghai down 5%. inflation data not good, mostly in line. oil is a