finally going to get actual votes. becky will see what's going to happen. we'll get a live report straight ahead. tomorrow is groundhog day. today is not. february 1st. "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box." ♪ good morning, everybody. and welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew ross sorkin. there is new data out of china showing the country's factory sector contracted for the sixth straight month in january. pmi coming in 49.4 that is slightly lower than what had been expected. most of the other indexes across asia finishing higher. nikkei up 2%. still getting a boost from the boj decision on friday to adopt those negative rates. u.s. equity futures at this hour

had been trading a little weaker. you can see right now, the dow futures down 81 points. the nasdaq down by 24. s&p coming off the worst start to the year since 2009. the blue chip index dropping 5.5% to start 2016. the s&p index down 5%. nasdaq losing nearly 8%. >> okay. we got a couple of other big stories we're watching. here's what's going on. barclays and credit suisse is set to face charges that they misled investors in so-called dark pools. they're not used by investors until they're executed. also barclays will admit it broke the law and pay $70 million. credit suisse will pay a $60 million fine bus an additional $24 million to the s.e.c.

and credit suisse will neither admit nor deny allegations as part of the settlement. of course, they never do. the cdc expected to declare an end to the e. coli outbreak which sickened more than 50 chipotle customers in nine states. "the wall street journal" saying that the cdc is not able to pinpoint the ingredient responsible for the contap nation. shares of chipotle has fallen 38% in the last six months. political news, becky was cheering about this, people in iowa will gather to designate their choice for president. the candidates will spend the day rallying supporters we're going to hear from john hardlynn in a few minutes. >> i've got a lot here. we read -- >> earnings? >> yes. i think we should split these. let me try to do these. stocks to watch today.

he's not a stock, he's actually a person, warren buffett. it shows beck shire hathaway bought about 2.5 million more shares of phillips 66 yesterday. berkshire bought 10 million shares in january. now he's got a roughly 13.7% stake. phillips 66 is now berkshire's sixth largest holding. elon musk is increasing his investment in tesla motors. he's exercising 532,000 stock options that he received in 2009. the shares are priced near $7. that's less than 3% of their current level. tesla says he must pay more than 4% of his own money to cover taxes. toyota is halting production in japan for six days this month due to a part shortage. the company says it stems from

an explosion in january at a steel manufacturing plant. overseas plants, though, won't be affected. ge striking a deal to investment $1.6 million in lit for r & d projects in the oil and gas sector. the company will develop a facility for turbines in tuesday canne tuscany. ge says the project is dubbed galileo. it will last production in oil and gas business by $1.7 billion over the next five years. coca-cola is taking a stake in a nigerian firm. the deal will allow coke to increase its stake in chi limited. the investment in africa by $17 billion by 2020. blackstone is reportedly shopping one of its biggest holds in china an i.t.

outsourcing firm call the pactera. the private equity firm has hired morgan stanley. could fetch up to $1 million. let's get a check on the markets this morning. we showed you the futures and there are some red arrows there this morning. it looks like the dow futures are down by about -- actually worse at this point. down by 92 points. s&p future off by 12. nasdaq down by 25. this comes after the market, the dow was up by 2.3% last week. nasdaq was up by 0.5%. in europe, the dax down by 0.7%. the cac in france off by a similar amount. ftse down by 0.4%. we showed you marks in asia overnight. manufacturing in china pushing down. the nikkei, though, closed up by 2% again this safer what we heard from the b.o.j last week. oil prices were the other big

thing boosting stock prices last week. last week, oil was up by $1.43. you can see this morning it's giving back some of those gains down by 43 cents to $33.18. the ten-year note at this point looks like it's yielding 1.9, 3.3%. below 2%. the dollar looks like it's down against the euro at 108.6. g up against the yen. finally gold prices up, $1,123 an ounce. a lot of keita hitting. auto sales and job reports. plus, we'll be hearing from three fed officials and then, of course, there is earnings that continue. one-fifth of the s&p 500 companies set to report this week including exxon, merck, pfizer and google parent

alphabet. the chief investment organize of merrill lynch investment group. and anthony chan is chief investor at chase. gentlemen, welcome. if you look at the markets there seems to be two things to boost prices. one has been oil prices going up. the second has been the intervention from central banks around the globe. every time we hear this, the market thinks it's great. we're not going to see higher rates from the fed. is that what it takes? are you watching earnings? >> it's a pabulum of the market. the earnings are down 5% year to year. and looks liked guidance is going to be weak for 2016. i think where we are, it's an interesting place where there's great dependency. interesting things there from weather and the like. i think a lot of the focus there on policy. back your point is important. it's become one of those markets

where dependency on stimulus is what's driving things higher than fund mamentafundamentals. earnings are weak. >> on friday there was a concerning number. economists will looking at that new orders x defense. it was a big dropoff. there's not a great explanation for it but that is capital expenditures from companies. does that tell you that american ceos are nervous and not willing to commit capital? >> i think it's telling you that but it's also telling you that the manufacturing sector is in dire straits, some would argue eve arecession. the economy is still growing something closer to 2%. and the federal reserve, i think what we'll hear from fischer today may have to acknowledge it may have to outsource some of its future tightening operations when they look at what's happening in japan and the

people's bank of china. and what is forthcoming or likely out of the central bank. >> when it comes to the economy, how do you feel about things overall? are we overreacting to the idea that this recession could bleed over from manufacturing into the broader economy? >> i think we're overreacting about the manufacturing weakness brewing over into the u.s. economy. but we may not be overreacting about the weakness globally. remember, if china sets for a hard earning, we don't expect it does, but when we look at other emerging markets in china that could spill over not only to the united states but the noble economy. that's why i put the probability of the u.s. at somewhere around 26%. >> bank of japan and ecb with the moves they've made recently what does that mean for the fed? does it back them into a corner in terms of not allowing them to raise rates? >> well, i don't look at it not allowing them.

it encourages them to hit the pause button. when other people ease, that's another way of saying the federal reserve is of effectively tightening so they don't have do do much. >> you don't expect to see high rates for a very long time? >> i'd be surprised if the federal reserve raises rates once or twice this year. maybe once. >> chris, you talk be about this pavlovian market. panting like a dog every time the fed says, well, maybe we won't raise. >> yeah. >> what does that mean for the market this year? it's a terrible thing that we're still thinking bad news is good news, what do you see as a result in stocks? >> i think a couple things. one, the story on the fundamentals is going to be much more mixed. i think the broad picture as anthony indicated is good for an economic growth. it's like a economy -- >> what? >> consumers drive the front

wheel. i think it's important. you probably don't get a recession out of it. it's important to remember that fiscal stimulus is worth half a percent of growth. we're really low in slow mode. the companies that make money low in slow mo tend to have a lot of operating and very low debt. >> it feels like companies have been conduct and cutting and cutting to try to cut things to the bone. do you still think companies that can cut more? >> well, i think what's missed is deflation in the tech sector. spend $1 million on computers last year. only spent 900,000 this year. technology is getting faster. i think companies have a little room to go. margins have stayed relatively high or come under pressure. it's really about no doubt. and a little bit of revenue

growth being translated by operating leverage. that's the focus. i think investors will pay up. >> can you talk stock specifics? >> you'll end up in an area with dividend growth. high quality. a lot of them end up in the consumer sector. they also end up in parts of utility. telecoms to some extent. but you also end up with a little bit of this focus on financials. >> all right. so, let's foscus on the jobs number that's coming out friday. what should we expect. what's the good news and potential downside? >> well, the good news is that we're still creating more jobs in addition to the labor force. we're looking for about 190,000. i look for average earnings to pick up. something in the neighborhood of 0.4 of 1%. it's still disappointing according to what they want to city, but still encouraging and the unemployment rate may be a surprise. the downside, down to 4.9%. >> and we're still talking about

the fed only raising one or two times this year? i mean, that's a little crazy. >> it is. it sounds crazy to you but you can't just look at the labor market. you have to look at the entire picture. keep in mind that the labor market is growing faster than the overall economy which by the way suggests that productivity it weak. that's why in the fourth quarter productivity is going to come in negative. and this year, we're not going to create 2.7 million jobs like last year. when companies realize that productivity is so weak that's not an encouragement to hire more. employment is slowing down.federal research has to acknowledge that situation. >> gentlemen, thank you. both great to sigh on a monday morning. coming up, when we return, after all the polls, glad-handing and baby condition it's now time for actual humans to gather and finally cast votes for presidential candidates in iowa. we have a rundown for the final polls and the candidate schedules just ahead. ♪

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earnings just in from health insurer aetna. the company reporting $1.30 a share. that's 16 cents better than estimates. revenue exceeding up the street was expecting.

aetna was helped by improved membership numbers and premiums in its medicare business among other factors. the company's full forecast does fall below the current estimate. the rebound looks like the stock is going to open higher. a couple of stocks to watch. hsbc reportedly imposing a houring and pay freeze. the european bank is in the middle of a major cost cutting drive. and plans for annual cost savings up to $5 billion by 20 17. and also two government probes into the country of pershing square in everlife. that big bet against herbal life. and has been a vocal critic of the company. and were we have new from mccal.

it's expected to increase for the lune are new year week-long holiday. i always wanted to go there. it's on my list. >> 12 hours later. >> it's nice. >> the whole day, gamble away. then go out at night on the town together. do it over again tomorrow. you don't think that would be fun? >> a long trip though. >> still suffering from the davos return. >> yes, it's a 12-hour flight. >> 12 hours. >> a lot of movies. >> eat, sleep a little. walk around. >> can walk around. >> and wear special socks. >> yeah. >> special sweets on the plane. >> they do? i didn't know about it. first major electoral event begins today. john harwood is in des moines with the story. you're a political guy so you

might be really happy just in general. but the rest of us are happy because it's like hitting your head against the wall for like nine months. it just feels good when you stop that it's finally going to get started to bring this to a resolution. this craziness. >> joe, a lot of iowans feel the same way. they've been having candidate s here for the last few days, nonstep. for months, really, having campaigns getting the phone calls. the mailers, the tv ads and they're sick of it. they're coming to the caucuses tonight with close races on both sides. the last des moines register poll showed hillary clinton with a three-point lead over bernie sanders. she's also got a superior organization. her camp is fairly confident they're going to hold the lead. bernie sanders said if it's a low turnout, we're not going to win the caucuses. if it's a high turnout maybe we can win.

we don't have a flood of new voters. good sign for hillary clinton. the republican race is very close. donald trump held say five-point lead in that register poll. ted cruz is more focused on ideology. this is a very conservative state. he closed with that strong appeal on the basis of ideology. donald trump on one of the sunday shows responds usually in personal terms. >> both trump and marco are attacking me. they're attacking with all their might. and we're drawing contrasts. and the contrasts are clear. and the contrasts by the way are substantive and policy-based. a vote for marco rubio is a vote for amnesty. an a vote for donald trump is a vote for obamacare. >>le ted cruz say total liar. i am so against obamacare. i've been stage for two years in my speeches. i'm going to repeal and replace obamacare. i don't know where he get this,

but he's say liaa liar. >> stakes are higher here for ted cruz. donald trump has got a big lead in new hampshire and states beyond new hampshire he could roll through the nomination if he wins here tonight. as for marco rubio he's hoping a say strong close third that could sling shot him into new hampshire. that's a state that he hopes voters will flock to. he's trying to create a role for himself the one establishment in the race. that's going to require chris christie and jeb bush and others to get out. you could see a three person race going on, trump, cruz and rubio. he could accelerate the path to the naum if he wins tonight, guys. >> i don't think of it as a red state. it's right next to wisconsin which i definitely don't think of as -- >> no? general elections, it say purple state. it's purple. it's very competitive, close

races. but the republican caucus electorate is more than 60% evangelical christian. it's very conserve tip. ted cruz is counting on those evangelicals to lift him to victory in this race. when i saw donald trump yesterday in council bluffs, he was appearing with jerry falwell jr. and his family trying to hold up his ties to organized religion as a counter to ted cruz. >> i know they have really good basketball teams. >> they do, although iowa state lost over the weekend. >> yep. i like watching iowa state, though. i picked them last year and got burned. their best player was hurt. there's 50 states, right? am i right? aren't there 50 states? >> there are. >> it's kind of weird -- >> you wonder why we're waiting so much attention to iowa. >> i know it's first, in the big picture, in past elections, as a news organization, we go crazy

with anything just because it's there and we have to do it. but there's like 50 states, right? there's a lot of -- it's good to be first. you get a lot of attention. we've probably said iowa like a thousand times in the past two or three months -- i know you have. it's pretty lucky, luck of the draw to be first, right? >> well you've got to start somewhere. >> true. >> and a lot of other states have tried to move in, take over from iowa. and what happens is once you get a dynamic where you're first, all the politicians who might make a decision to change it become intimidated by that. they're scared to change it. interestingly donald trump was talking about this very directly with iowa voters in council bluffs at this rally. he said, first of all, you guys have a lousy record. you never pick a winner. why don't you pick a winner this time, that's me. he was talking about the fact that huckabee and santorum and others have -- if you do that, and you make me president, i promise you, i'm going to be in

control. nobody will threaten your status. you'll stay right where you are. >> and you have a lot of ethanol. it's going to be on your table, three meals a day. >> that's right. >> do you want to talk about that? >> a quick question, john -- >> hey, by the way, guys, let me tell you a quick story, then, becky ask me the question. talking about ethanol. i ran out of gas on i-80 on the way to -- >> what! >> i would have picked you up. >> he did. and somebody tweeted why don't you just grab a bunch of corn and put it in your gas tank. >> there have been concerns about weather, about a snowstorm potential keeping home some people not getting as much of a turnout. is that still in the forecast? >> the weather forecasters say the blizzard is not supposed to start until after the caucuses. so, it's possible that some people may be spooked by that and stay home. not believing that it will start

later than. but iowans are pretty tough. and the weather, people have been pretty clear it's not coming until after the caucuses. 8:00 p.m. eastern time they start here in iowa. >> before you go, john, i was supposed to talk about this right after you get off but i want to ask you directly about it which is microsoft. microsoft is doing some of the underlying back end work for this actual vote. it's the first time they've been involved. i don't know if other technology companies have been involved. and of course, people like bernie sanders and others have said that the game is now stacked box of that. what do you make of that? >> well bernie sanders thinks all the games are stacked, financially and otherwise. but, no, i don't believe that microsoft is going to distort the caucus results to help establishment candidate hillary clinton or any other establishment candidate. >> all right. we're going to go. real quickly -- did you see

buddy -- with that game with oklahoma? who's the best player and best team in the country? i'm talking about the lsu game. oklahoma is good. >> well, i think this guy ben simmons is supposed to be the best player. they're projecting him as the number one pick. >> he got beat by buddy hewitt. a six-point game with over 30 points saturday. >> i can tell you that my duke blue devils are the reigning champion. >> north carolina, i haven't seen them play, they are good? they must be. >> they're very good. i think they're one or two. yeah, i think it's going to be a wild open tournament. there's no dominant team this year as far as i can tell. >> xavier, xavier is dominant. becky is getting ready with they are picks. >> this is all i'm going to do. >> rutgers good? >> one finger. i pick the whole bracket. that's how i beat them last

year. >> go with your heart and pick rutgers. >> that might be a mistake. >> no, this is the thing. i drive them crazy because with one finger -- >> i know. >> he takes months trying to figure it out. >> this year, i've got it. i've been watching and i've got a good feel, john. anyway, thank you, john harwood. get this over with, please. >> you got it. when we come back, yahoo! ceo marissa mayer working to turn around the company. and new hinteds with her future with yahoo!. we have the details next. right now, as we head to a break, take a look at s&p's winners and losers. ♪

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♪ ♪ welcome back to "squawk box." it's time for "executive edge." a couple stories that grabbed our attention this morning. the one that grabbed my attention. "staying power" in the new york post. marissa mayer, if you thought she was going, she's not going anywhere. investors felt she would try to sell the company but this article suggests that in discussions with her and the

board, they're not doing anything. >> and that long-term investors want her to stay is that -- >> that's the question. >> right. that's my question. are they asking her to stay or it sounds like she's not going anywhere? >> she's not planning on going anywhere. by the way, there are other investors that like her. we'll see where things go. i believe she's still on maternity leave. >> i think she's coming back to the company pretty soon. i just saw her on facebook recently. >> i don't know why we talk about it. >> because it's such a tiny company. >> because it's -- no one uses their shorts anymore. i guess they got content. you take out alibaba, there's no market. it's like a former dotcom. we don't sit here talking about aol. marissa mayer, for whatever reason, to you, she's interesting. >> no, one is aol was a $3.4

billion company before it sold off to veverizon. >> it's worth $2 billion or $5 billion -- >> and then back to aol -- >> i don't know, i'll give you about 1,000 $3 billion companies. >> it's symbolic. >> and i don't know why. >> because people want it to be better. people want to fix it. they want it to come back. it's a comeback story. >> i like fake meat and fake. >> there's a story in "the wall street journal" about you've heard this already, the idea of growing meat. where you take it and put in a bio reactor. >> i tasted it. it was good.

>> you tasted it? i must not have been here. >> it was called beyond meat. and hamburgers. there's no reason that you can't reconstitute the actual chemicals. >> just like you brew beer. i would believe it. but they say by doing it, there are several different companies that bring this cultured to market. it creates a fraction of the nutrients, avoids wastes and antibiotics. >> to take it a step further, the future could look like all do you is things for subsistence. you don't care about taste. and soilent is the idea here. and they make it, they make it from -- it used to be that you'd breed algae to try to make bio fuel. it's somehow made from the same type of algae, it contains all

the nutrients you need. 400 calories. you drink it. cost $2.50 a bottle. the person described it not offensive, many liken it to the taste and texture of milk that's left over after you finish a bowl of cheerios. >> okay. >> if it's regular cheerios without sugar, it's not that good. with honey nut cheerios or if you put sugar into it, it's pretty darn good. i could drink that a lot. >> but couldn't have anything else. >> she never eats any food because it tastes good or because she wants to, it's only for -- >> so david chang the restauranteur chef at mapesh sells -- it's called cereal milk.

it tastes like corn flakes that have been left -- it's great. >> because of the sugar. but i don't think -- >> but for mass audiences at least, a lot of people like that. >> this is made for programmers in the silicon valley who were going to stay up all night and didn't have time to go eat. >> i'm saying, with cliff bars in my bag in davos, and that's all i eat box i'm too busy. >> whatever it is, this guy says it staves off the hunger and mental fog that inevitably arrives when you skip breakfast. >> how many times can you drink it? >> that's a lot of calories. >> a post apocalyptic zombie world -- >> just 400 calories a day? >> ah, now i understand. the zombie world. >> it would be something you use. you don't have to prepare it. it's all there. it's in a bottle. and it's -- it's going to replace -- it says here chicken fingers and pizza.

you're just going to have a bottle of soilent -- "soilent green" -- >> you see -- it's a movie. >> okay. >> we got a lot more to talk about. when we return, should you buy stocks that go back in time? that is, stocks that fall to levels that lasted two years ago. as we head to break, a quick memory refresher. the top song two years ago was "timber" by pit bull. and the top movie was the kevin hart movie "ride along." 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.

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let's take a look at the u.s. equity futures on this monday morning. we have seen red arrows all morning long. dow futures down by 6 points. the s&p down by 2. the markets actually gained ground last week. we're going back in time. the question is you should buy stocks when they go back in time. first, mike, explain what in the world you're talking about. >> we're trading at the s&p levels at levels we first reached in early 2014. in fact, in january lows in the market down 15% off the highs we first reached those levels of 1815 in december 2013. so, if you think about it, you kind of undid a couple years of progress. but it really wasn't that much progress. essentially pointing out, let's look back in the past when

you've been trading at a level that was first reached almost two years before, how has that been as a decision to buy stock at that moment? now, it turns out there's only been about 44 times since 1928 when you had this exact set of circumstances in place. you profited one in three years out 89% of the time. so it seems like it's a decent shortcut to say, well, time's on your side when you're basically buying a market that really has been treading water for a long period. >> i'm surprised it's only happened 44 times. it doesn't seem like it's been that -- >> it's a pretty arbitrary set of circumstances. go back 21 months if trading within 2% of the level you were back then. that's the condition so, yes, you've had many times when, you know, stocks were down for the past five years and maybe you paid to buy them. really to point out here, even if we assume for a moment that last may was the high in the market for now, it was a very, very unexuberant high.

we did not surge into that high. we've been flattening out for a couple years now. and it just sort of shows that we really didn't have that final thrust higher. >> this is what people look for when they're going back or going up, too. i'm not convinced long term it exists. i'm not sure full-term or immediate term if a true capitulation happens or a euphoric high happens. >> it doesn't happen. >> it contrary indicator that virtually everybody that comes on the set right now is negative. >> really speaks to the condition from a long time. average stock down 20% from a high and nothing has seemed to work for a while. look at friday's really great rally. all you did was get back to a 5% loss for the month. it was like the boring defensive sectors that led the way. telecom, staples and utilities.

i think people really do not show what to make of it because the assumptions have been rough. in a two-year note yield trading down from 1% to .127% was in nobody's playbook. >> the investors and they're not reallial allowed to, but having a flat year, isn't it worth it when you see the masters of the universe exposed for the naked edge emperors that they really are? they come in worth all of this money and we listen to them. >> are you talking about a lousy performance -- >> i'm not mentioning any names. just to know that they're as bad as we are. >> after this with a lot of money, they build a stake, it's going to go up because they put it in play and they think they're smart. >> they measure things arbitrarily. >> right. but i'm willing to just to prove

that their blow hards. >> some people define a rich man as one who is just a little less poorer than the next guy. i think that's what you have going on here. in terms of the active stuff, you're right. it's there for a quick move. i've always said for the investors the one thing you have over those guys you're not in the market every day. you're not in the newspaper with the performance and you not taking the moves that they can afford to take. >> thanks, mike. >> good to see you. all right. the denver broncos -- that's right, there's a super bowl coming up. and the carolina panthers have made their way to california for super bowl 50 which is coming on sunday. panthers star quarterback cam newton making his arrival in style. he got off the team plane wearing tight fitting gold and zebra striped pants that are reportedly versace.

accent jeans go for $850. shortly after, cam was seen wearing them. right after you saw them, they sold out online. mine have been arrived yet. >> please wear those in. >> you will not be able to sport them at your super bowl party even if you want to because it's going to take time before they come. i've got to figure out something else to wear. coming up, iran is open for business but senator chris coons has a warning for those countries signing deals with iran. the senator joins us after the break to explain.

iran is open for business and the country's leaders areev globe is aware. iran recently signing major deals with several companies including airbus and an oil giant. should the u.s. just say no to ties with iran. we're joined by senator who just returned who was just over to iran to smooth allies with iran. we have allies oppose tod iran that must feel slighted. >> our first visit to austria

was to the agency, the international atomic energy agency that will now have complete access to all iran's fuel cycle. its uranium mines and mills. a focus of the trip was to meet with leaders in israel and saudi arabia and turkey and ensure them that we haven't lost our minds. look, we were able to reach nuclear deals with the soviet union, with communist china, to reduce the threat level to our country and the world. i think it is possible for us, i think we have, achieved real progress towards peace with the jc jcpoa with iran. we also have to be clear with our allies. iran is still a dangerous country and still has, i think, nuclear ambitions and is actively supporting terrorism throughout the region and the world. sanctions are still in place against iran for a range of

different things. ballistic missile program. human rights vacations and support for terrorism in the region. i have had a series of meetings to remind them that they shouldn't be surprised. >> if you were a cynic or a republican and you say, we seem to roll over every time they seem to either just sort of slap us in the face after the deal, whether it's with -- now they're giving medals to the guys who were holding our sailors at gunpoint. or they throw a missile in our face and in the morning we put on sanctions but by the afternoon we back off on the sanctions or secretary kerry admits to becky that some of the money, the $50 billion, will be definitely used to fund terrorist activity. we wanted the deal so badly. i don't know if it's whether for the legacy or what. there is almost nothing we could do to where we'd respond or screw up the deal, and they do

whatever they want. because whatever they do we'll stick with the deal. >> let's be clear on what they did do. what they had to do in order to get access to the finances. they had to ship the entire stockpile of enriched uranium outside of the country. th they had to pour concrete into a reactor and give access to the iaea. better intelligence than we've ever had. >> couldn't we have gotten that plus concessions about funding terrorist activities or letting our guys go? i mean, so all we did was the nuclear thing and we didn't ask for anything else. it's like damn the torpedos. >> i disagree that we didn't ask for anything else. five americans have just been released. i do think those were being

negotiated on parallel tracks. the point i have been making on -- >> you're much tougher than the obama administration. >> frankly, we've been clear all along that we don't except or support or tolerate their ballistic missile program, the support for terrorism, the human rights violations. what i am responsible for is representing the people in the state of delaware and america's interests. it's my hope that senators on both parties will recognize we can and should be tougher. >> what reaction did you get from the allies? >> grave concern. particularly in turkey and saudi arabia where i think there is more of an emotional are you leaving us, are you going back to pre-1979? are you mistakenly thinking that today's iranians are the persians of decades ago. the israelis of a much more nuanced and sophisticated understanding. happy with our intelligence partnership but concerned about the regional -- >> when they say that, you say what? >> we're determined to stay

engaged in this region. we're you vital ally. we need to work more closely in the fight against isis. i think actions speak a lot louder than words in this region and i think these are folks who are understandably nervous about their security situation. >> you mentioned that we still have a lot of places where we won't do business with iran. but the europeans wasted no time with cutting a ton of deals. >> that's right. >> what do you think about that? >> it's one of the few places in the world where you have got a possibly rapidly growing emerging market on the frontiers of europe. countries like peugeot had a big business relationship there before the sanctions that we orchestrated internationally, largely shut down their economy's access to the world. >> the airbus deal must have been negotiated for a very long time. >> absolutely. one of the things i think we need to do a good job of is communicating clearly that we will snap back sanctions, and under the agreement we have the

ability to do it unilaterally if, and i say when, we catch them cheating on this deal. >> could definitely have french cars. it's like a trojan horse. go ahead and use those. anyway, senator coons, thank you. >> were you making fun of the bengals? >> no. i was making fun of her mispronunciation of the bengals. >> philadelphia, the eagles. ki >> the raven? >> thank you. when we come back hedge fund manager had a strong track record for his predictions last year, including calling $30 oil. now he is out with his new predictions for 2016. including more stimulus from the fed. mark joins us next.

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the countdown is on after a brutal month the calendar changes, and now the focus turns to jobs. will the data have the fed changing its tune about future rate hikes? the showdown in iowa. the candidates making a last-minute push to get all the support they can ahead of tonight's caucuses. the first votes finally being cast in the race for the white house. super bowl, super ads. >> your mother was an orange. was your father medical marijuana? >> you look like your broke your yoga mat. companies writing $5 million checks for 30-second ads of time with some new names getting in on the games. >> snacks? that's smart. sir martin sorrell tells us about the big ad game. the second hour of "squawk box" begins right now.

live from the beating heart of business, new york city. this is "squawk box." i'm sorry. welcome back to "squawk box" here on cnbc. first in business worldwide. i'm joe kernen along with rebecca quick and andrew ross sorkin. new data out of china showing that the country's factory sector contracted, six straight months. this was january's reading. official manufacturing pmi coming in at 49.4. and you can take this -- that number to the bank from china. it was slightly short of estimates. chinese stocks closed lower on the news but less than 2% is not -- with what we've seen recently, not that big a deal. 26 or so. which is like two-year -- close to the lows before the big runup. most other major indexes across asia finished higher.

getting a boost from the decision friday to adopt negative rates. do we go with indexes or indices. >> i say indices. when i said it people didn't know what i was talking about. >> they used to beat it into our heads. >> there is a reason for it not to be indexes. >> the english language is like that. all these weird things. >> u.s. equity futures at this hour are indicated lower. we were up almost 500. we haven't talked about that. if we were down 500 on friday, we have have the crepe hangers and the music playing. but up 500, we haven't mentioned it. >> a lousy end of the month. >> the house is not burning. check out the price of oil. >> which we are following closely. >> yeah. oil this morning is down. it's at 33. so i saw a really great -- did

you see the great number from one of these guys, the latest? that's the lowest i've seen. >> 12? >> 7. >> $7. $7 oil. >> where when we were at 110 it was 300. at 33, someone has to do 7. >> when will it be at 1? >> when will people pay you to take it out of your yard. pay you to take it away. you all right? >> 85 i heard this morning. michael rothman, the guy who i used to use as a source. >> 85 cents? >> $85. >> where was he a year ago. >> i don't know where he was a year ago. michael is a smart guy. >> this has confounded just about everybody. >> 70 and 85. health insurer aetna reporting quarterly profit of $1.37 per share. exceeding analysts forecast. helped by improved membership numbers and premiums in the

medicare business among other factors. the full-year 2016 forecast falls below consensus estimates. warren buffett increasing exposure in the oil sector. berkshire hathaway bought more shares of phillips 66. he aught 8 million shares in january giving it a roughly 13.7% stake. now his sixth largest stock holding. they've been doing buy-backs over time. people across iowa gather tonight to designate their choice for president. the hawkeye state holds the first in the nation caucuses. candidates will spend the day rallying supporters. donald trump leading in the polls over senator ted cruz. ben carson will be our guest this morning. toyota halting production in japan for six days this month because of a parts shortage. the company says it stems from an explosion in january at a

steel manufacturing plant. overseas plants will not be affected. g.e. striking a deal to invest $36 million in italy for r&d projects in the oil and gas sector. they'll build turbines in italy. coca cola is taking a 40% stake in a nigerian drink and snack maker. the deal allows coke to increase its ownership in chi limited in three years. it's part of coke's plan to boost investment in africa by the year 2020. let's start the countdown to jobs friday. labor department putting the finishing touches on january figures. what should the markets expect from the data? steve is here with more on that. steve. >> this is a huge week, becky. we begin with a single question. can the u.s. economy save the

u.s. economy? a deluge the data including the january jobs report this week. it will help the market answer several critical questions. first, can the consumer, job growth, and services overcome the drag from oil, weak manufacturing and weak overseas growth? second, will the q 4 weakness that we have, 0.7% gdp give way to at least some strength in the first quarter of 2016? does the fed back down? and how much damage was done to consumers, to the psyche of ceos from the january stock selloff. lots of data and speeches this week to help to answer the questions. let's show you what we have coming up. isn manufacturing. the first big january piece out of the box. auto sales on tuesday. we kick off our cnbc wrap it update and get our first read of the first quarter 2016. on wednesday the services sector

also on wednesday at 10:00 to haep to answer that question whether services remain strong while manufacturing is weak. claims and productivity will be a disaster because of strong job growth and gdp. here is a look at the numbers we're looking for. a big step-down. talk out there that the december non-farm payrolls was bolstered by the warmer weather, leading to quite a bit of hiring. stepping down to a pretty good range here, 186 thought to be enough in order to keep the unemployment rate steady. i have seen some thinking we'll get our first four handle on unemployment in the week. hourly wages pretty well at 0.3%. >> we spent the last two weeks talking about how the ecb and bank of japan is backing the fed into a corner where it will be more difficult for them to raise rates because of what it would mean for currency fluctuations for the strength of the dollar as a result.

if you get a 4.9 unemployment rate, is that have the opposite effect on which one wins? >> i'm very interested to see the market reaction and the fed reaction. the question is, can the u.s. economy save the u.s. economy, which is sort of saying is the u.s. economic data seen as more important than all the other stuff we're talking about? we have had this vacuum of data and we haven't had any really data to answer the question of how strong the u.s. economy is. a lousy number in the fourth quie quarter, 0.7%. the u.s. has to look at the u.s. data. if you're starting to put four handles on unemployment. if service is holding up, a lot of people are thinking we've seen the worst of the effect of the downturn in equipment spending and oil investment on the u.s. economy, that now that starts to roll off. you had a decent inventory draw-down in the fourth quarter. probably will have another in the first quarter. you won't have trade maybe be as

big a subtraction to growth. just a lot of questions out there. but it's a good week because i think we'll get answers. and i think on friday come back and say, well, what did we learn? we learned the u.s. economy either could or could not save it from itself. >> it will be an interesting week. thank you. >> we'll continue the conversation and maybe bring in some of the other issues into the next conversation. mark yusko is out with his list of top predictions for the year. last year he nailed out out of 11. correctly predicting $30 per barrel for oil. nobody else was doing that. he also said deflation would be more of an economic head wind or other nations. joining us is mark from morgan creek capital. it has $3.7 billion in assets under management. good morning to you. >> good morning. thanks for having me. >> you nailed more than a handful from last year. ten on the list.

i don't know if you want to go top ten style, letterman style, go from ten or comment on some of the stuff that leaseman was talking about. what caught me by surprise. number ten, uncle karl, karl icahn, is right that there is danger in the credit markets. i always think the credit markets are the greatest symbol to where everything else is going. how worried should we be? >> you know, i think we should be quite worried, not 2008 worried, but i have been calling this, i think in one of mine i call it #2000, 2.0. i think credit will continue to deteriorate. we haven't begun to see the beginning of the bankruptcies. i think drilling activity will slow. a lot of companies will go b.k., leading to some really bad

numbers economically. you tie number 10 and number 1 together, back to what you guys were talking about. i think the ism number will continue to disappoint. it's 48 today. that gives us about a 75% chance, based on history, of having a recession sometime in the next 12 months. so there is the r word. i think there are a lot of things that we should be worried about, not calamitous but just concerned. >> given that concern, how are you positioning yourself? if you're an investor what do you do? sitting in cash and waiting for the collapse to take place? >> cash is actually a great asset. people don't think of it like an asset but it really is. some of the greatest investors on the planet right now. seth klarman 40% in cash. warren, julian robertson, a lot of cash, the most he has ever had, actually. cash is a great asset in these turbulent times. i think you want to avoid the buy the dip mentality in junk

bonds, please. everybody likes to buy the dips. i think the spreads will blow out more over the course of the year. there are some other things you can do. other assets that we kind of like. one of our big surprises, though it's not looking so good right now, is that india and china will actually have a good year, but they haven't started off so well. >> where does oil end this year, since you got it right last year? one of the few. >> here is the interesting thing about oil. there's a lot of people who have been trying to call the bottom. people started calling the bottom in 2014 at $75 and $80. it went to $50 and they called the bottom there. now they've called the bottom at $26.55 the other day. i think this first quarter we said the surprise that it would be in the 20s and it has been. does it have to go lower? you guys were talking earlier about someone said $7 this morning. i actually saw a cartoon the other day with a lemonade stand

and a saudi sheik next to it with $5 oil. i don't think it will get there but i think 20s is where we clear the market. because there are a lot of storage problems out there. i think by the end of the year, to answer your question, we're in the 40s, starting to have some relative stability. but it's going to take a while for u.s. production to slow enough to get prices to come off. >> mark, i don't know if you saw the front page of the "wall street journal" this morning. u.s. hedge funds bet against china, a number of big hedge funds. >> yeah. >> have effectively shorted asian currencies including the yuan and hong kong dollar. is that a good trade in your mind? >> look, i think it's a very interesting trade. it reminds me there are a lot of these guys doing the exact same thing with the yen and betting against japanese government bonds, which hasn't worked out so well, the widow-maker. negative rates now. look, i think it's an

interesting story. king dollar gets dethroned this year and the remmen is stronger. as it gets included in the sdr later in the year that puts president bush on it. the chinese have a long-term patient plan on transitioning from a manufacturing economy to a rconsumer economy. their service number is strengthening. it shouldn't be a surprise that they want their currency weaker to encourage exports. >> mark, are you putting money behind that thought? either shorting the dollar or going long the yuan? >> we took our long dollar exposure off. we were long the dollar -- you have to look at it in terms of pairs. we still want to be short the yen. we still want to be short the euro. we have not piled on this short

rem minby trade. >> mark, thank you. appreciate it very much. coming up. iran -- we talked about this already -- is open for business. iranian president rouhani striking billions of dollars worth of deals. is the u.s. missing out on an opportunity? we'll talk to a former homeland security and counter-terrorism advisor about the potential to do business with tehran. the zika virus is grabbing headlines but it's not the only disease that people need to worry about. coming up in the next half-hour of "squawk box." thank you, we'll call you. evening, film noir, smoke, atmosphere... bob... you're a young farmhand and e*trade is your cow. milk it. e*trade is all about seizing opportunity.

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you experience tv. iranian president rouhani went on something of a shopping spree in europe last week negotiating about $40 billion worth of deals to do business between iran and major european companies. frances town send is a vice president. and former advisor to george w. bush. i guess these countries can't control themselves. it's almost like a frontier market in africa or something where there is no infrastructure but you can't dispute the growth that will occur but it's a fully developed country that no one is in. i guess they can't help themselves. >> for many companies in europe it's an emerging market.

here is the problem people haven't anticipated. presumably the countries cutting the deals last week will have to contend with. that is, you cut the big deals, $40 billion worth. you have to bank somewhere. that's where you run into u.s. sanctions. so these companies that are going to do business with iran, airbus, for example, 118 planes, you've got to get money through the financial system. even international banks, standard charter, hsbc, all have relationships with u.s. banking regulators. and so you're not going to -- they're not entirely free and clear of u.s. sanctions, and to run into iran to do these deals. >> so they'll have to take money out in shopping bags, essentially? >> it will be interesting to see. the companies will have to do the due diligence about who are the patterrtners. they'll have to convince u.s.

regulators it's not a violation of sanctions. >> what are the chances that you put a cart before a horse or horse before a cart that this instills in what is almost a secular society in iran with this theocracy in charge. you're doing business with these 21st century european countries but still if someone commits adulatory you stone them. things going on in iran are not 21st century things and the europeans are pretending they're a normal trading partner. is this the carrot that induces that regime to be put out and it becomes a normal country again? >> i'm not holding my breath, joe. i wouldn't want to be the executive of airbus or any other country who has to live there. let's remember who is in charge. that's that guardian council.

it's a group of clerics, frankly, who determine who can run for election and frankly what the outcome is going to be, both for the parliamentary elections and for the assembly of experts. the assembly of experts is going to pick the next ayatollah, presumably. we shouldn't expect the hard-liners in iran are very much in power, and they're feeling pretty aggressive about these elections. they're not looking for the moderates. they didn't qualify son. he is considered a moderate. >> the ayatollah? >> no the current. the prior ayatollah's son, tried to stand for election. >> considered too moderate. >> he wouldn't take a religious test. yeah. >> wow. >> yeah. we always try to assume the best outcome is going to -- was it worth it to bring them into the civilized world, or should we have continued to isolate and

try to change it that way? because if they don't change after we've done this, they'll have more money to fund terrorist activities and everything else. is there a reason for optimism, that common sense eventually prevails over there? >> i don't think we have any reason to believe that. look, this is a country that has exports terrorism as part of their foreign policy. $200 million a year to hezbollah. billions of dollars to prop up the assad regime. >> they don't hide it. >> the facts are clear. they become more aggressive, not less, in the region. they're in yemen supporting the houthi. in afghanistan. this is a very aggressive sort of -- >> they would like to see the end of not only israel but the great staatan, united states. >> many people in this country talk about rouhani the president as being a moderate. there have been more executions of oppositionists under rouhani

than the former president. this is really an election between the conservatives and the ultraconservatives. the moderates really have no chance in this election. >> you might criticize the obama administration, but they can fall back on they shipped out there enriched uranium. we're not saying we like what they're doing but at least they stopped that. the european -- it's all about the dollar -- or the euro. >> great. commercial opportunity. >> they're not questioning what they are. it's just for how much. >> that's exactly right. >> i hope they're happy. >> thank you. >> you're welcome. >> nice to see you. coming up, a new deal in the energy sector coming up. check out the futures right now. dow down triple digits. 131 points. back in a moment.

rem\

. news just out on a multibillion dollar deal. dominion is buying questar.

the transaction is expected to be completed by the end of the year. questar closed on friday trading at $29.30. the stock is up by 20% on the news. when we return we're less than a week away from super bowl 50. companies are shelling out more than ever for 30-second television ads. we'll break down the ad numbers. plus, going digital. wpp founder and ceo, sir martin sorrell, on how online ads are revamping -- a ramping up on the campaign trail. "squawk box" will be back after a quick break.

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showdown in iowa, the candidates making their final push as the first votes are cast in the road to the white house. fears of the zika virus, the world health organization meeting today to discuss how to contain the latest outbreak. and the super bowl 50 showdown, the teams have arrived, some in suits, and some in zebra stripes. it is monday, february 1st, 2016. you' you're watching "squawk box" on

cnbc. first in business worldwide. welcome back to "squawk box" right here on cnbc. among the stories front and center at this hour, a new month kicking off a number of economy economic reports. in an hour we'll get december personal income and spending. at 10:00 investors get a look at december construction spending and the ism manufacturing index. investigations going on in both investigator ackman and herbal life showing nothing warranting charges according to the "wall street journal." ackman maintained it's nothing more than a pyramid scheme and the fact that there will be no case maybe ends a little bit of this. we'll see. the 2016 presidential campaign kicking into high gear with the caucuses kicking into high gear.

some experts saying a higher turnout would help donald trump in the gop race and bernie sanders in his race against hillary clinton. we'll also be focusing on the gop race next hour when we talk to republican presidential candidate ben carson. the denver broncos and carolina panthers landed in san jose yesterday. peyton manning wearing brown shoes. this could be the last game of his storied career. panthers cam newton getting the most buzz with his arriving. his pants getting a lot of attention this morning. the $850 pair of pants is apparently sold out. i will just tell you that, if they blow out denver -- i'm not saying they will because denver has a great defense -- but if they blow them out this will be the year of cam newton as mvp.

he will have arrived. when you say newton, it won't mean sir isaac or fig. because he was so dominant watching the regular season, dominant in the playoffs, and if it happens again, it's just, he has arrived and he is here to stay. doesn't matter what anyone says about him. >> he can wear whatever pants he wants. >> whatever pants he wants, do whatever he wants. he will be the king and the mvp of the year. it's media day for the players. advertisers getting ready to be a big part of the game. julia telling us who is paying up and why. david is getting in a better mood as we get closer and closer. i know he'll be like gloating. >> that's right, joe. despite all the talk about cord cutting and digital video, marketers are spending more money than ever to reach the biggest tv audience of the year. reports that 30-second spots for the game are selling for as much as $5 million up 11% from last

year and more than 70% higher than what was paid in 2010. why the surge in spending? with overall ratings sliding and audiences more fragmented than ever the super bowl remains a place where advertisers can reach a big audience. even more people are expected to tune in this year than last. eight auto makers including newcomer buick will represent what's traditionally been the largest sector in the super bowl. six financial services companies are advertising. it's the first time there have been more than three since 2010. sun trust, sofi and paypal. who is not returning in go daddy, nationwide. nissan and mercedes-benz. they're expected to sit this one out. but many are willing to bet big. eight advertisers spent more than 10% of their full-year

media budgets on the super bowl last year. becky. >> julia, thank you very much. joining us to talk more about this and more is sir martin sorrell. >> good morning. >> he is the ceo of the ad giant wpp. great to have you here. >> correct. >> let's talk about the super bowl first. >> right. >> joe was marveling at the numbers. >> like olympics, formula 1, super bowl is another. world cup. just another example. increasingly going at a premium. i think people are talking about $5 million per 30-second spot. no wonder les is even more optimistic. >> do you get a discount if you buy a lot for one client? >> we use our buying power as best as we can. we buy about, what is it, $80 billion -- >> the $5 million is the rate card. i am curious -- >> interestingly the french

research company that calculates billings, it calculates our billings at 600 billion. it gives you an idea of the sort of differences to rate card there are. >> good to know. >> martin, we have been trying to get our heads around what's happened to the economy and the stock markets around the globe. >> struggling. struggling. it's a bit mucky. >> advertising is usually one of the first places that you see ceos start to cut out. have you noticed anything, just based on the chaos in the first month of the year? >> the new normal we've discussed on the program for many years since about 2011. slow growth. limited pricing power because of lack of inflation. as a result of that, focus on cost. i don't think anything new has happened. it's a continuation of what we have seen for four or five years, with the world growing at

3.5% real, there is little room to maneuver. the fast-growth markets are not growing as fast as they used to be. china is, again, up and down. it was volatile for us last year. probably will be the same this year. of the brics, the only one left standing at the moment is india. prime minister modi doing a sterling job at the moment. brazil, russia and china are under pressure. the next 11 markets like indonesia, nigeria, mexico, have also proven to be quite difficult. so the new normal is sort of slow growth. unlikely change. and we have the activists, very active, the disrupters, the zero base budgeters, all putting pressure on the clients. >> we saw some numbers just about what you're spending on digital media. >> about 40% of the business. >> that's kind of stunning. >> considering 15 years ago it was virtually zero, yes. you could say the same thing about the fast-growth markets.

15 years ago, 12% of the business. today about a third. 50% of our revenue base has changed in the last 15 years. if i was here in 15 years' time i would say it would change again. >> as a guy who has been doing this for a very long time, a traditional ad man. >> that's a compliment. >> what do you think about digital advertising versus advertising in traditional media? >> you see it in the political campaigns. you'll see it in iowa, in new hampshire. you're going to see it in nevada and elsewhere. what we have seen with companies that are part of our group like blue state digital, ran the obama campaign for the two campaigns, also joel benneson who is heavily involved with hillary clinton's campaign. much higher targeted, much more specific and much clevererer in terms of the way they reach people. i think the poll will show that about a third of the information that people receive will be received online.

and of course, with younger age groups it tends to be even greater. so facebook, google, twitter, all have become extremely important weapons, if i can put it that way, in the context of political elections. elections this year, probably will be spending $4 billion, $4.5 billion. even donald trump lately has come into the advertising. >> can you ask you about twitter? >> 50% last year on twitter. >> a report is out this morning from the information suggesting as the prices come down, firms are looking at potentially whether there is a restructuring or buyout. i wonder whether it will impact the stock today. do you say it has a bright future as an independent entity? >> i always get myself in trouble by saying twitter is a pr medium, not a branding

meadi medium. facebook was $1 billion last year. twitter went from $150 million to $225 million. facebook, from 650 to a billion. google went from 2.9 to 3 billion to 4 billion. >> a huge dropout from the first. >> the huge drop from google to facebook. google is still 4 to 1. >> right. >> that's not the case if you look at their advertising revenues globally. google search is still, to my mind, the most powerful medium. it's highly correlated to sales and effectiveness. >> what do advertisers look for? let's say a world cup viewer, a hundred million. a hundred million super bowl viewers. are the super bowl viewers more demographically attractive, or do they attract a different type of advertiser? >> whether we like it or not, super bowl is still primarily an

american institution. >> right, but a definitely higher income, higher net worth? >> world cup is certainly much more global in terms of its appeal. therefore, you're talking about different horses for different courses. >> different people -- >> you can't generalize it all. but, what both of those events demonstrate, as rio 2016 will demonstrate. it will be a great and stunning visual television event. and the live audiences will be very significant and powerful. >> before i let you delve into our political process which you like to do, even though you have no right, i'll delve into brexit. >> just reading before i came on saying the brexit camp are gaining traction. i think we all vote to stay in. >> you do. right now public opinion it goes the other way, right? >> no. the polls are a third, a third,

a third. third favor in staying in, a third going out and a third don't know. same with scottish referendum. >> that's going to happen again too. they may go this time. >> if we come out it raises the issue -- the scots are in favor of staying in. the campaign will be very important. it's crucial that cameron gets his deal, whatever it is, sorted by the middle of february so we have the election before the summer. because another migrant crisis through the summer with pictures of the horrible pictures we all abhor will not be good. >> so you say 70% stay? >> i would say -- it's going to be tight. it's going to be very tight. >> what are the -- what's the probability in your view? >> i would say probably about two-thirds. yeah. to stay. yeah. just about. but it's very dependent on what happens over the summer and the timing of the election. if they delay the election until

next year, because technically they could do that, or until later after summer, i think that won't be good news. it's important that cameron comes back from brussels february 14th or 16th, and lays out the deal, whatever the deal is, and then we vote as quickly as possible. the campaign will also be opinion because a lot of people who say they're undecided don't have enough information. that's important. >> you say it's ironic that the scots are in favor of staying in the eu because they want to leave the uk. >> most of the conservative government will want to stay. >> just need a stable rulership at st. andrews. >> as long as we don't secede st. andrews. twitter is up. already 6% on that news this morning. >> on the our spin being up?

>> what's it mean? we'll talk about it in a minute. coming up, the world health organization holding an emergency meeting. our next guest says there are other bugs we need to worry about now. that's next. at the top of the hour boone pickens will tell us why he's feeling bullish about crude prices. check out the price of oil. $32, $31 on wti crude. back in a moment. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances.

welcome back to "squawk box." futures right now, come on futures! oh, boy. they were down 80 before. now they're down 150. china base today, i guess, shockingly, sixth straight month of contraction in manufacturing there. we were up 500 on friday. maybe it's a little give-back of the one of the stories we're following, the cdc set to declare an end to the e. coli outbreak that sickened more than 50 customers at chipotle in nine states last year. the "wall street journal" reports that the cdc has not been able to pinpoint the actual ingredient responsible for the contamination, but, in any case,

they're putting an end to the whole issue. but it's unsettling that you never did figure out the actual source. moving on. we can talk about that or we can also -- which is worse? the zika virus? >> zika virus doesn't bother -- unless you're pregnant. >> it's concerned by mosquitos that also -- sorry -- but it's also spread by mosquitos that spread the dengue virus. >> one out of five people even show symptoms. it's a fever. >> if you're pregnant, this is the -- if you're pregnant this is the worse thing you could imagine. >> the link between that and microencephly is not completely established. >> you saw the story over the weekend. it was the journal or "new york times" about the doctors that have tracked it down. >> i definitely didn't see it if it was in the "new york times." go ahead. the zika virus could infect three to four million people this year. he's missing out, by the way. according to the world health organization which is holding an emergency meeting later today on

the mosquito-borne virus. our next guess says we need to be more proactive in combatting diseases and there are more deadly viruses. joining us the director for center for disease research and policy at minnesota. doctor, you're scaring me saying there are more deadly viruses that we're not worried about. what are those and what should we be doing? >> first of all, let's not take our eye off the ball. zika virus is very important. the link is quite clear between that virus and microcephaly as well as a condition known as guillain-barre syndrome, a type of paralysis that's also very important. unlike ebola, which was limited to certain populations in west africa, meaning a limited number of people, there are literally hundreds of millions of people in the americas who are at risk for contracting zika virus infection. to answer your question in terms of the viruses we need to worry about, pandemic influenza has been the lion king of infectious

diseases dating back to antiquity. if there is any one thing in the world today that could kill hundreds of millions of people it's infectious disease and influenza leads the way. ebola could surely come back. the mers virus we talked about in the middle east where it caused a large outbreak in seoul, could show up in any american city or any city in the world and cause another major outbreak. there are a number of them we're not prepared for. >> there has been finger pointing about vaccines. you suggest that we shouldn't -- there is no blame to go around, meaning we shouldn't have had a vaccine already set up for this? >> take a step back. we have to look at vaccines in general. one of the problems we have today is we want the pharmaceutical industry to act as a flphilanthropic company. they've invested many dollars in vaccines for which there may be

no return on investment. we have to understand that world governments will have to take a role in terms of support in order to get the private sector involved. in terms of the zika virus, i personally have been talking about its appearance in the americas for more than two years, suggesting it's coming but it's only been in recent months that we have understood the severity of the zika virus and the fact that it's possible there have been genetic changes in it. until the outbreak in french polynesia in 2013-14 we didn't see the cases of microcephaly or guillain-barre syndrome. when you look at all the diseases we need vaccines for, it didn't rise to the top of the list. now that's changed. in our business you have to expect the unexpected and react quickly. yeah, we need other vaccines. we need ebola and mers vaccines and better flu vaccines. we now need zika virus vaccines. it's not like somebody was asleep at the switch. >> you mentioned governments

should pay for it. if we wanted to create vaccines for all of the viruses that you are talking about, what would the cost be and who should bear that cost? >> well, you know, one person said in terms of oil streemetre pay me now or later. look at cost benefit. one influenza pandemic could wreak havoc with the world. nobody is manufacturing in the developing world because of a pandemic like this, the economic costs are dramatic. any investment in vaccines has to be put in that perspective. same thing is true with the mers virus. i helping to work on the outbreak in seoul where the virus came from the middle east and a person who infected 80 people in the emergency room in one of the most modern hospitals in the world. the hospital was shut down for weeks. imagine if that was johns hopkins or the mayo clinic or

cleveland clinic. think of the economic devastation it would cause besides the loss of life. some of these vaccines from a cost standpoint we can't afford not to get involved. companies right now will not get a return on investment for the ebola vaccines, so why would they step up again? it's a shared global responsibility that we all need to look at. >> i know it's bad to the pharmaceutical companies make money but if they're not going to, they're not going to develop the vaccines. for me, unless the governments do it, no one will do it. we both got something we didn't like. both heard something we didn't like. >> doctor, thank you, sir. >> thank you very much. have a good day. >> thanks for scaring us a little bit but it's good conversation. when we come back this morning, style in the sky. boeing winning a contract to update air force one. how much is it costing the pentagon? details next right here on "squawk box." it's hard to find time to keep up on my shows.

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and take them anywhere. ready or not, here i come! (whispers) now hide-and-seek time can also be catch-up-on-my-shows time. here i come! can't find you anywhere! don't settle for u-verse. x1 from xfinity will change the way you experience tv. welcome back to "squawk box." air force one is getting a facelift. the pentagon announcing that boeing has won a contract to start working on a brand-new fleet of air force one presidential aircraft based on a 747-8 jumbo jet. the initial contract is worth $25.8 million. details about the total value of the new contract have not been released at this point.

25 billion? what can you buy with that? a couple of seats. right? how much does a 747 cost? hundreds of millions of dollars. oil prices moving lower again. about opec be forced to cut production? boone pickens give us his bullish case for crude. the showdown in iowa. gop candidate ben carson will talk to us, softly, at 8:40 a.m. eastern time. "squawk box" returns in a moment. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. we're creating new platforms across channels so customers can effortlessly invest,

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ready to run. the bulls look to charge past the worst start of the year for stocks since 2009, but it won't be easy. sluggish earnings, economic fears, pain in the oil patch and china concerns all in the way. the road to the white house. or at least the nomination. iowa holds its first in the nation caucuses today. plus, life in the fast lane. >> watch out! hello! signs that luxury leasing is surging despite tougher loan turns. "squawk box" shifts into overdrive as the final hour of "squawk box" begins right now. ♪ ♪ life is a highway live from the post powerful city in the world, new york, this is "squawk box."

♪ i want to drive it all night long ♪ welcome back to "squawk box" right here on cnbc. first in business worldwide. i'm andrew ross sorkin along with joe kernen and rebecca quick. less than 90 minutes away from the opening bell on wall street. the dow looks like it would open off down about 120 points. nasdaq looking to open down as well off 28 points. s&p 500 off 15 points. personal income and spending due at 8:30 eastern. the stories the investors talking about today. china's factory sector contracted for the sixth straight month in january. check out shares of twitter right now. the shares have been jumping on a report from cnbc contributor jessica lesson at the information. she reports silver like have considered a deal for twitter.

as a result the stock is up about 5%. we've seen it up by as much as 7% today. warren buffett increasing his exposure in the oil sector. berkshire hathaway bought 2.5 million more shares of phillips 66 last week. berkshire bought 10.8 million shares in january giving it a 13.7% stake in the company. to shed more insight into this, here is what buffett told us on september 8th of last year when we noted he had been buying more shares of phillips 66 and selling shares of exxon, mobile. he said we're not buying it as a refiner. we're not buying it as an integrated oil company. we're buying it because we like the company and the management very much. ever since greg has taken over and spun it out of phillips he's done a terrific job. so i like the company. andrew, you were asking earlier for his distinction between the two. looking at the transcript, he

said part of it, phillips 66 has no upstream production. 66 has a big chemicals division. mid-stream business. so he's not buying it as a refiner. >> playing the dividend and stock buy-back as well. two takeover deals. dominion buying questar for $4.4 billion in cash. and medical products maker stroo striker buying sage products for $2.8 billion in cash. sage, which makes a wide variety of disposable health care products is currently owned by private equity firm madison

dearborn. breaking news in the pharmaceutical industry. abbott buying alere. alere closed friday at $37.20 per share. abbott says it will add to its earnings after it closes. if that's pronounced differently. it's their fault for choosing the name which could be pronounced a dozen different ways. they should have thought of that when they named it alere or whatever the hell that is. >> i'm going to use that from now on. blame the company. >> i've tried to get you to do that. >> blame the company or the person, the parents. >> if you don't know why is it your fault? it's all on you. all this is on you. >> i think it's a brilliant way to think about it. >> good. to iowa. of course, it is decision day in iowa. timed to the caucus in the hawkeye state.

john harwood joins us live from des moines. good morning, john. >> good morning, andrew. it's been a wild sprint over the last weekend before the iowa caucuses which are now 12 hours away. four top candidates. hillary clinton in the des moines register bpoll with a 3 point lead. donald trump with a 5-point lead over cruz on the republican side. as you would expect the rhetoric at the end on policy and personal characteristics is getting tough. >> both trump and marco are attacking me with all their might. and we're drawing contrasts. the contrasts are clear. and the contrasts are substantive and policy based. a vote for marco rubio is a vote for amnesty. a vote for trump is a vote or obamacare. >> ted cruz is a total liar. i am so against obamacare. i've been saying it for years in my speeches. i don't know where he gets this

but se a liar. >> here are the key questions we'll answer tonight. the first of all is whether bernie sanders and donald trump, who have had the most enthusiasm and biggest rallies, can they harvest that energy and take it out on caucus night. it's more complicated than it is for a typical primary voting so that's a challenge. second of all, can the organizations of ted cruz and hillary clinton, which are believed to be superior, more sophisticated than their opponents', can they actually function and deliver a high turnout? that will be one of the principle questions. the third, can marco rubio pass somebody and grab second? that would give him a sling-shot into new hampshire where he hopes for a breakout performance. the weather is very mild today, whatever that tells you about prospects for a decent turnout tonight. we do have a blizzard forecast, but the snow is not supposed to

start until 10:00. that's -- 10:00 local time here. that's three hours after the caucuses begin. may not be a factor in the outcome tonight, guys. >> okay, john. it's -- you think this is easier than calling an iowa-ohio state game? what's your prediction? does trump pull this one out in your view? >> my prediction at the last is -- this is a lot of guesswork, but i'm going to assume hillary clinton wins on the democratic side. i think ted cruz might be able to sneak past donald trump. organization counts. it doesn't count as much on the republican side as it is on the democratic side. the republicans have a little simpler process. the question all along has been can trump deliver what he shows up as having on the ground at these big rallies that he has. you know, does donald trump under-perform tonight. that's the big question. the cruz people that i talked to

over the weekend were confident that they were in a position, even though they had a lead previously and had lost that lead, that they think they've got the organization and the targeting that will deliver an upset. we'll see. he certainly needs that upset to propel his campaign. >> who finishes third? >> rubio. i think that's the general expectation. that's what rubio's campaign says. we were watching that last "register" poll for signs of a late surge. the register poll which has a good record for accuracy here picked up the beginnings of a rick santorum surge in 2012. they showed him behind romney but saw him picking it up. we don't see it for rubio so far. over the four days of polling that the "register" took for the last survey, marco rubio fell over that time, which was the time that encompassed the last

debate on thursday night. >> all right, john. you'll be watching that. north carolina plays tonight, and they play louisville. in 12-game winning streak -- >> where is the game? >> i don't know whether it's louisville or unc. they have only beaten one ranked opponent, ucla, that's not ranked anymore. so they'll get a test tonight. do you hate them? >> no, i don't hate them at all. i think they have a terrific program. >> you're a duke guy. >> i am a duke guy but -- >> it's a big rival. >> dean smith was a great coach. williams is a great coach. nothing but respect for the programment program. i want to beat their program. don't hate them. >> okay, mr. p.c. unbelievable! can't even get a little hate, a little rivalry. in the next half hour we'll be joined by republican presidential hopeful dr. ben carson. it will be interesting. crude prices under prices.

the commodity still down 70% since the beginning of 2014 with global oil supplies near record highs, our next guest remains bullish. boone pickens. good morning, boone. what we need to see as we keep seeing the rigged counts come down. you can give us the current numbers that bolster your case. but you have to admit, for some reason, u.s. suppliers have not turned things off as quickly. it's like they don't need as much money as we thought they needed to where they'd turn things off. or it's a different dynamic somehow. they can leave it on longer or turn it on quicker or something. what changed? >> what changed for me -- you know, i missed last year, so i want to announce that to start with. but once you hit bottom, which was i think $20.16 you double in

12 months from historical information. so here you are at $30. and i think -- i think you'll be $52 by the end of the year. the decline is where i messed up. it did not decline as fast as i thought it would. but you have to decline half a million barrels a day. you already have done that. you hit nine-seven and you're down to nine-two now. 9 million 2 a day. the rest of the world, you've shut down the riggs everywhere. we came down from 1609 rigs in november '14. last week we slipped under 500. we're down into the 400s now. you've come down over 1,000 riggs. if you come to midland, texas,

you can see them all right there when you land at the airport. you start seeing rigs stacked. we'll be back. no question about it. i think the russians, you know, are starting to get mouthy about cutting -- doing something, because really it's costing them. it's costing the saudis. it's costing our industry in america a lot too. of course, it gets opec when the price goes down. so they're all talking about it. they've talked about maybe a meeting in february, but they have the big meeting in june. so we may just ride it out till june before something is done. but they're going to have to get the price up. and it will all happen just like it has in the past. >> probably, when we least expect it. a couple of things, though,

boone. is it really different, though, and it's possible now where you can shut in a well and the minute it gets back to where you'd like to sell it, is it much easier to turn it back on? i've heard people say that. the other thing, people say it's being skewed by -- there is so much that we're trying to store it offshore and didn't take into account all these storage facilities that, you know, that it's so much cheaper because it's all out there ready to come on shore anytime when the price goes up. >> you can store in tankers. it's expensive if you do -- if you go that way. but we're still building visitors. and building inventories. we will for another several months. then we start to draw. once you start to draw, you don't start back building again. the draw will come in a few months. it will become pretty clear. but we do have -- we do have a lot of oil in inventory.

but we're only one million to one and a half million oversupplied in the market. what does that mean? go back and look at '84, '85, '86, you were over-supplied by 15 million barrels a day. so now you're pretty close. and it will happen. don't rush the monkey and you'll see a better show. and we'll head back up to $50, $60 a barrel by the end of the year. >> don't rush the monkey and you'll see a better show. that's a good one, boone. >> you know where that comes from? >> i do want to hear that. >> well, the monkey on the street corner with the organ grinder, and the monkey is performing. he draws an audience. he says to the audience, don't rush the monkey. you'll see a better show. that -- that's an old oklahoma term. >> it's a really good one. i hate when they abuse the

monkey with, if he weeon't do t show. >> no, you can't do that anymore. no more of that kind of training. you have to just -- >> i big to differ. people still do it all the time, boone. wow! anyway, we were hoping that you would be -- you have pants on? remember the time you came on and you had the gym shorts on. you're not in the gym working out now. that's a full two-piece suit you've got on, right? >> yeah. i have a very sad day today. i have a good friend's funeral. >> oh, no. that's the dark suit. okay. that is sad. >> sorry to hear that, boone. >> sorry to hear. >> no, i didn't work out this morning because you got me started too early, but i'll be back at 6:30 in the morning. i think i have tomorrow. i'm not kidding when i say this -- 300 yards of lunges coming up tomorrow. >> whoa! wow. >> that's something.

>> boone, what -- >> you know, i don't -- i've never had a problem with my knees, can you believe it? >> no. >> knock on the -- >> no. >> knock on wood. >> can you comment quickly about natural gas prices too, what you expect to have happen? will those trade in tandem with wti? >> well, the natural gas, same old story. we have more natural gas than any country in the world. and we have the cheapest energy in america. and natural gas is, you know, it's incredible but we've just over supplied the market to the point where, i don't know when i'll ever see $3 natural gas again. and it's -- it's slow going. can you imagine being in the winter, just about out of the winter now, and never having seen $3 gas this winter? so it's -- you know, we only

have 200 rigs running on natural -- maybe 300 rigs running for natural gas now. but you're down to 500, under 500 for oil. and you have pretty well shut the drilling business down. >> all right, boone. swear to god, you look about 65 years old. every time you come on i look up and say, what is boone getting up to now. it's unbelievable. send me something, your regimen or food -- >> works out every day. every morning. >> you know how old i am? >> i wasn't going to say it. you look about 65. it's unbelievable to me that you're going to be 90 in three or four years, right? incredible. >> yeah. i'll be 88 in may. >> that's unreal. >> mike milliken says, you keep hanging around. i don't know how long you do that. >> all right, boone.

thanks, good luck. >> you bet. coming up when we return, signs of luxury leasing surging despite tougher loan terms. we hop behind the wheel when "squawk" comes back. shall

. welcome back to "squawk

box." making headlines this morning. jpmorgan reportedly partnering with a start-up to make block chain technology the goal is to reduce the cost and complexity of trading. lock chain best known as the basis of digital currency. a lot of issues about bit coin. jamie thinks the bit coin doesn't really work but lock chain -- >> you're starting to hear more of that at davos. auto news. new numbers today show a jump in luxury leasing despite tough turns. phil lebeau joins us with the story. good morning, phil. >> good morning, becky. used to be if you were going to lease a vehicle you would lease it with 12,000 miles per year being the allowance. that's starting to change because of greater interest in luxury auto leases. luxury overall continues to be a big part of the market. overall, 27% of the vehicles financed are through leases. the remainder are financed, people are buying them with auto

loans. 63% of the luxury vehicles sold every month are through leases. and the new push is to keep the monthly payments under $400, if at all possible. here is the reason why. if you can get a lease right now on average, it's about $95 cheaper than if you were to finance the monthly payment through an auto loan. here is what we're seeing more often these days. average monthly payment for a luxury lease, or what's being offered when you see it in showrooms, under $400. there are 24 different luxury models right now being offered with a luxury lease under $400. it was just eight three years ago. why are they able to do this? why did they offer the leases at this price? the mileage allowance has dropped down to 10,000 or 7,50 miles. it's a tougher term but attracts people into the showroom. >> five years ago and even further back, you were typically

seeing 12,000 mile a year leases advertised as opposed to 10,000 or less. it's very prevalent. i would say the vast majority of leases that you see advertised on luxury vehicles are at the lower mileage points. >> take a look at shares of gm, ford and toyota, all of which have been under pressure over the last year. keep this in mind about not only luxury leases but all leases. once you go over that annual limit in terms of mileage, there is a 20 or 25 cent per mile penalty that you will have to pay. and with gas being as cheap as it is right now, guys, a lot of people don't think about that when they're in their lease. they just want to drive. that's a proven fact. as a result, at the end of the lease they will find a hefty penalty, if you will. that's a shift we're seeing in terms of attracting buyers to the luxury leases. >> thank you so much, phil. when we come back, breaking economic news, personal income

and spending. plus, the battle of the bears. the weekend winner at the box office is straight ahead.

don't know what movies you guys watched this weekend but the winner at the box office was "kung fu panda 3," in the movie's opening weekend it raked in $41 million in north america. it's earned $1.3 billion

globally since the first installment came out in 2008. breaking economic news coming up. personal income and spending plus the inside line on google parent alphabet. company set to post quarterly results this afternoon. back in a moment. in new york state, we believe tomorrow starts today. all across the state 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

you can feel it in the air, the excitement. because we're just seconds away from personal income and data spending data for december. futures still down right now. rick santelli standing by with the numbers. >> drup rolm roll. up .3. last month's .3 on revised spending. we end up with unchanged. last month we garnered an extra couple tenths on the revision. now stands at up .5. the internals. real personal spending, up half the .2 we expected, up .1. deflator month over month down .1. year over year up .6.

.2 higher than the last look. personal consumption expenditure. i know there is a lot here, right? the core month over month, goose egg. unchanged. year over year up 1.4. on the latter couple, the fed seems to pay attention to those metrics. they should probably pay attention to the spiral of lower prices created by negative interest rates continuing to overtake the world. the shanghai composite still hovering around 2700, a little below. far cry from the 2927 significant bottom from last year that i at least am referencing as a pivot. of course, yields hovering very close, slightly above 190. we want to continue to monitor all the global aspects of the post stimulus response by the bank of japan and its ripples through the market. what are you seeing out there, joe? back to you. >> i am seeing the wonder, beauty and majesty of the american electoral process starting today. i know you love it too, rick.

something just hit. 11 point voter intensity gap between democrats and republicans, favoring republicans. never been that high before. from here on out, we'll see what happens day in and day out. i can't give a prediction. i don't know if you can. it will be something that -- something to behold. >> well, i don't have any predictions. i just know that, on one side of the aisle we have a large field, it's open for debate as to who might rise to the top. but on the other side it still amazes me that, in a country that has changed the face of the globe from the industrial revolution to today, that the frontrunner at least very tied to the frontrunner, somebody who embarks on a philosophical socialism that seems completely unsuited for the country and the future, but i really like the line that, you know, young

people like bernie because college is free. it might be free when you're 18 to 21 but you'll pay for it until you're 60. >> the big contest between a far left socialist and bernie sanders. it's going to be interesting to see. >> i saw what you did there. >> i didn't say -- when i saw it the first time, it had a word, an adjective that i would be afraid to use. about an aging socialist, but i censored it because i wouldn't say that. >> sort of censored now that you've explained the nonsense. >> you're kind of doing it anyway. >> bernie sanders is, i think, 74. remember reagan got a lot of, to this day, a lot of criticism as being too old when he entered the -- in his second term. and i think he finished his term when he was 78, right? or something? >> second term. >> i mean, we're talking bernie

would be 75 when he started his first term, which is -- but it's a different -- >> second term he could get into the 80s. >> right. >> we saw boone pickens, who is 87. it's a different, i think, age. take it from me. you have to take ten years off nominal age -- >> you have to get older and older to look older to us every year. talking about earning central. alphabet posting fourth quarter results after the bell. gene munster joins us. gene, this is a situation where every quarter that google has reported or alphabet has reported since the new cfo, they've beat expectations. it has to get tougher and tougher to do, right? >> she is two for two. she has been a rock star for the stock. investors love her, in part because of some of the language she used last quarter. she said revenue growth and expense management are not

mutually exclusive. those are magical words for investors, that they can have margin expansion and revenue growth, which is particular surprising for a company the size of google. and so i think that she is off to a great start. to your point about does it get more and more difficult, yes, it does, but she has really set expectations that she can deliver on that. that's one of the big things people are looking for going into tonight. >> this is the first quarter, if i'm correct, that they'll be breaking out a lot of the segment information, so you'll have a lot more to dig through. what will you be looking for? >> well, like you said, the other segmentation is called other bets. that's what they're referring to. what we're specifically looking for is what the advertising ebitda margin it. with a normal reporting structure it would be 13%. investors tend to think, when they break out the advertising ebitda will be around 55%. so that's kind of the bogey

going into tonight. if it's a little bit better, people will say that's great because they're making more on advertising. if it's a little bit below 55% investors might say they wish it was a little bit more profitable on the advertising business. >> we had sir martin sorrell, the ceo of advertising giant wpp, on earlier this morning. we saw statistics with him that blew me away. he pointed out that his agency alone placed $4 billion with ads in google, which compared to $1 billion they did with facebook. i always think of them in the same category. but a four-to-one number like that. do you see google that much ahead of others like facebook? >> facebook is growing faster. last quarter at call it 50%. google is growing at like 15%. part of it is the large numbers that you mentioned. and so just the absolute dollars are obviously more with google.

it's performance advertising, more tried and true. so i think the simple way to think about this is facebook is gaining ad market share, but google still has the absolute dollars. and still is gaining in the overall ad market, growing at 15% is a respectively growth rate. >> gene, what do you think just in terms of your price target for this company? what would you tell people to do with the stock ahead of the earnings call today? >> well, we're directionally positive. we don't see this as a big event. the earnings tonight, as a big event for the stock over the next few quarters. for investors who want to own a great company with a lot of different angles. the other ones haven't been vetted yet. we need to wait to see the segmentation tonight, but i think this is still a great story to own. >> okay. >> gene, real quick before you go, on twitter, you saw the news? >> twitter is not one that i cover. >> you don't cover at all? >> don't cover it, yep.

>> do you think google gets to a trillion before apple or not, gene? >> i'll take apple over google because i think that there is going to be multiple expansion. i still believe in these other -- the hope springs eternal in other product categories down the road. >> i tell you, you better get used to saying hope springs eternal, my friend. what's your price target with apple now? >> 157. >> down from a previous price target? >> yes. we were at 172 before they reported the last quarter. >> hmm! >> all right, all right. i know. all you guys tell me the market is wrong, you're right. i got it. i'll factor that into things. thank you. >> thank you. coming up when we return, what i was referencing with the twitter news. twitter shares jumping right now. we'll tell you why when we come back. plus, decision day in iowa, candidates making a final full-court press across the

state. republican presidential hopeful dr. ben carson joins us live from des moines next. back in a moment.

welcome back to "squawk box," everyone. we've been watching the futures this morning and looking at weaker numbers. off the worst levels today. dow down by 150 points. still down triple digits. a decline of 128 points. s&p by 16. nasdaq down by 27. among today's stocks to watch, twitter, the shares jumping on a report from cnbc contributor

jessica lesson at the information. she reports andressen and silver lake are considered a deal. political news. after the polls, debates and stump speeches, it's come down to this. the very first official votes in the 2016 presidential race, the iowa caucuses set to get under way later today. on the republican side, polling averages still giving donald trump an edge but senators cruz and rubio remain within striking distance. dr. ben carson remains in the hunt. so tonight it all comes down to the ground game in iowa. that's where we find cnbc senior contributor larry, the great american cudlo, joined by republican presidential hopeful ben carson. free markets still the best path to prosperity, larry. that's the only thing i know. >> he is my favorite free market

neurosurgeon. we love to have him. thank you, joe. dr. carson, we appreciate it. >> thank you. >> one little horse race thing. i'm not sure people know that in the "des moines register" poll you're fourth at 10% and climbing if i'm not mistaken. >> we are climbing. there is a lot of movement going on right now that i have noticed in the last few days. there is a tendency for a lot of the media to ignore me, but the people are not ignoring me. it's going to be very interesting. >> if you come out of here -- let me speculate. say you come out with a third place finish, which would be surprising. would that move you right into new hampshire? you got stuff on the ground in new hampshire? >> we have. >> are you ready for that kind of stardom? >> we have stuff on the ground all over the country. we are very much prepared. so it will be very interesting to see what happens, no question about it. >> you've got some. back to policy, substance. one of my disappointments about

the last debate was there was virtually no discussion of the economy. >> exactly. >> which in the best scientific terms i can put it, stinks right now. fourth quarter 0.7%. this is the worst recovery since world war ii. it's not just obama. it's actually gone 15 years we're less than 2% economic growth. >> it has. here is the thing that people are not paying attention to. this generation is the first one in the history of america not expected to do better than their parents. and that's the beginning of a trend. and some people say it's the new normal. but there is nothing normal about it. we shouldn't accept it. it's because we have taken the most powerful economic engine the world has ever known and we have wrapped it with regulations. 81,000 pages of new regulations just last year. the cost of regulations, almost $2 trillion. break it down per family. $24,000 per family of four, which happens also to be the poverty level for a family of

four. so we talk about fighting poverty. why don't we fight it by getting rid of the unnecessary regulations? these things cost an incredible amount of money. it's basically a tax, a very regressive tax because everybody has to pay it at the same level. people have no clue what's going on, and people come and take advantage of them and they will them things like the reason you're not doing well is because of those rich people. and if we take their money everything will be fine. no. then everybody will be poor. that doesn't work. that's socialism. >> which is more important? inequality or solving poverty? >> solving poverty takes care of inequality. >> that is a revelation. you don't hear that much, but a lot of distinguished people agree with you. i guess i want to know, what would a president carson do in the first 90, 120 days? where would you go? >> one of the things that i think is very important is to begin to give people hope once again. and i believe that -- this is a

no-brainer -- we have the highest corporate tax rate in the developed world. i would try to establish a six-month tax hiatus so that we could bring back the more than $2.1 trillion overseas. >> no penalty. >> repatriate it. the only stipulation, 10% of it has to be used in enterprise zones and to create jobs for people on welfare and who are unemployed and under employed. >> the jack kemp enterprise zone. >> exactly. that would be the greatest stimulus since fdr's new deal and wouldn't cost taxpayers a penny. it gets corporate america used to investing in the communities around them. they've kind of lost that over the years because the government has taken it on. in the '60s, lbj said, we the government will eliminate poverty. how did that work out? $19 trillion later.

more people on welfare, broken homes, poverty, crime, incarceration. government is not supposed to do that. the private sector is supposed to do that and the government can help facilitate it. >> you have a pretty aggressive business tax cut besides the repatriation. remind me. >> 14.9%. >> just happens to be .9. no rounding. >> we don't round it out. we worked the numbers out precisely. not only that, it's a 14.9% flat tax rate for everybody. over the course of not too long a period of time, i think the rate would come down. the reason that we put it up at 14.9 is because there are certain things that must be taken care of, you know. infrastructural things, hardening the grid, solidifying the military. right now our military spending is down around 3.4%. traditionally it's been at 4%.

that's at at time wh time when great danger. that's not to say there isn't waste in the military. there is weatheaste in everythi. i would cut fat out of all the government agencies. when you do things like that, you begin to apply systems to the governmental departments and agencies, then you get real efficiency. that's what the people deserve. >> one last point. you bring up the war and so forth. would a president carson formally declare war against isis? i am not hearing the candidates say that. i don't know how we can destroy them unless we do. what's your take? >> if you go to ben carson.com and look at our plan to destroy isis. i would submit we have more policy than anybody else. it's all right there absolutely. that's part of it. declaring war on the islamic state. anybody who aids them then becomes a traitor. but it also brings it up to a higher level of cognizance when

we begin to think of how we must change our immigration policies, our visa policies, how we have to keep an eye on people who are here. this is war. and, you know, i think they are taking advantage of the fact that we're not vigilant and that we're politically correct. >> that's dr. ben carson, slash the corporate tax rate, go to enterprise zones, be tough on a moratorium on visas is what i am hearing, and declare war against isis. i hope you do great, sir, because that's the kudlow play book also. >> good to be with you. >> thanks, everybody. back to joe, becky and even andrew. >> even andrew. geez, larry. give you all this screen time. good interview, though. senator designate. when we come back cramer joins

us live from the new york stock exchange. stocks to watch, including a multi-billion dollar view. check out the price of oil this morning. down below $33 dollar deal in the energy sector. you're watching "squawk on the street" on cnbc.

♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪

welcome back to "squawk on the street." tell you about a few stocks on the move. aetna posting better than expected earnings in revenue. the health insurer was helped by improved membership numbers and margins in its medicare business. it is projecting full year 2016 earnings below estimates, but the stock is looking like it's trading higher today. closed at 101.84. the bid is at 102.50. the ask is 103. cardinal health beating the street on the top and bottom line, they were helped by growth in its customer base. that stock looks like it is trading right around -- splitting where it closed. 81.37 is where it closed. the ask is 81.55. we have some deal news. pow producer dominion resour resource buying natural gas

company questar. >> let's get down to the new york stock exchange. earlier, jim, we were referencing that classic airplane, that striker striker, we mentioned the medical device maker. i said was that robert stack. do you know what robert stack's name was rex cramer. >> from the untouchable? >> rex cramer. striker was robert hayes. he was the guy along with julie h hagard. a lot of famous cramers. you want to talk politics? google? alphab alphabet? >> i don't know. we have these deals. questar that andrew just mentioned. dominion getting back in. questar has a natural gas division. dominion sold all of its properties back in 2007 for 11 billion. the abbott aleer deal, probably

some other bidders. the aetna numbers good. things are good, futures are bad. that's not been an unusual situation. >> almost 500 points on friday, jim. know, if it was 500 down we would be talking about it, i think. >> i'd have to tell you we're in a year where it's a blink of an eye. that whole last half hour was incredible. i just think that what we are, the volatility, the lack of any sort of volume, people are just -- whoever comes in with the last buy moves the market. it's not a healthy market. >> right. i wonder how that works itself out. we didn't see the euphoria at the top, maybe we didn't see the capitulation at the bottom. maybe that means more of this. any way -- >> that's a great analysis. just really true. >> all right. we'll see you in a few minutes. thanks. >> thank you. okay. coming up, we have stocks on the move, plus earnings report of the day. we'll give it to you when we come back in a moment.

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eastern time. 10:00, isn manufacturing. december construction spending. this afternoon, alphabet, formerly google, i can't get over that still, headline earnings central. google's parent company set to post quarterly results after the close. shares down about 1% so far this year. look at a couple other stocks to watch this morning, tesla ceo elon musk is increasing his investment in the electric carmaker by exorcising 532,000 stock options. and covering the taxes with cash rather than selling some of the current holdings. got them much cheaper. what did we say? $7. >> barclays and credit suisse on the list. the banks settling with new york state and with the s.e.c. in a case alleging the companies mislead investors in their dark pools. they will pay a combined total

of 154 million. a lot of those charts looked similar financial charts and elsewhere. nothing feels that plush. >> futures still looking at the dow with a decline of 134 points. join us tomorrow. ♪ good morning. welcome to "squawk on the street," i'm david faber along with jim cramer. we are live from the new york stock exchange, carl quintanilla is off today. let's look at futures. you heard becky talking about it. we'll be preparing for a lower open on the broader averages, as you can see there, judging from the futures, 30 minutes before trading begins. european markets not particularly strong. all down, let's call it, around 1% on the major averages