we had a big run the end of january. >> thanks for that. >> thank you, guys, both for joining us here today. it's a great to see you. we'll see you later today, brian. >> thank you. >> that does it for us today. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ just move on up move on up ♪ good wednesday morning. welcome back to "squawk on the street." i'm carl quintanilla with david faber and jim cramer. stocks up. wholesale prices run hot. the biggest beat in more than a year. europe with some decent gains despite mild data in the uk and the ppi number pushing the ten-year back above 18 for the first time in two weeks. oil is trying to get reacquainted with 30. big kellogg joins us and jim

will be live with the always entertaining t-mobile ceo john legere. that's going to be big. good earnings. >> good earnings. a lot of signups and he's going to do a little ball busting as he says. >> yes. meanwhile, eamon with the latest. >> this is a real standoff between apple and the fbi. the fbi as you know investigating that san bernardino terror attack back in december. were able to obtain the iphone of one of the shooters, syed farook. they haven't been able to get complete access to the phone. they've gone to court that's ordering apple to comply with the fbi's demand to help get access to the phone. it requires that the u.s.

government be able to bypass or disable the iphone's auto erase function. it also would enable access a device port, bluetooth, wi-fi or other protocol and they'd like to ensure that the phone won't delay passcode attempts. they're going to try to get in entering passcode after passcode to try to randomly guess what the passcode is of that cell phone. they don't want any delay instituted by the iphone itself as an effort to combat that. apple's tim cook, however, saying last night, they're going resist this court order. here's what tim cook had to say last night in a statement saying opposing this order is not something we say lightly. feel we must speak up in what we see as an overreach by the go. we're challenging the fbi with the deepest respect for american democracy and a love of our country. that sets up a big standoff now.

apple will have five days to respond to this court order. where this goes from here, though, is anybody's guess. we have suddenly gone from a theoretical debate about encryption in this country to a very real debate involving real terrorists who killed americans on american soil two months ago. the real question is where apple will land on all this and what the implications will be for encryption in the future in the united states. >> thank you very much for this. what a discussion this is turning out to be. at the same time they're trying to launch apple pay tomorrow in china. a lot going on. >> yeah. maybe this is the kind of thing -- i think apple is trying to fight it because they guarantee privacy. you can't just turn around because the government says we want it. this is something that could very quickly go to the supreme court. >> very quickly.

if it goes very quickly, you'll have eight justices looking at instead of nine. unprecedented. all 789 to justify its expansion of the thought, that being the fbi. that certainly sounds, doesn't it, something that is looked on fwi justices of the supreme court. >> having recently studied scalia. he was a great man on this. no one had more of a view about right to bear arms. no one really felt that was the right to bear arms until he got involved. this is the type of thing that a strict reading of the constitution would say, 54 supreme court. >> you have no idea. right to privacy is a key area. >> it's all made up. it is. there's no right -- hey, listen. i attended that class. >> it's true. >> i attended that class. there's a penumbra that allows

the individual to say there's a right to privacy but the courts have repeatedly held, forget it, there is no right to privacy when it comes to government. but obviously tim cook is saying, hey, you know what? we made a contract with our own customers and we have to enforce the contract. >> this shines the spotlight on what is going to be continued navigation or conflagration in a sense between the national security establishment and our technology companies. >> yes. >> and apple's leading that. listen, in a way it's good brand building for them. >> is it? >> i think in some ways it is, carl. they're putting it out there and they're saying we're standing up if what we believe our customers deserve. >> there's backlash to that. it's not as simple as turning over something. we receive that happen many times in other cases. this is about creating a tool to go in and as cook says hack our own customers. >> obviously this is going to

affect all the different cell phone companies. i do feel that tim cook's in a jam here because who wants to aid and abet terrorism, which i'm sure is going to be the government's argument. but he's talking about a totally different right that he basically -- the companies guarantee to people. what is he going to do? just fold? obvious will i they can take this to a federal court and get this. i am surprised that for two months they sat on it. what were they doing for two months, saying, hey, listen, we can't get it? they need to come up with a new code, new ios. his point is you do it once -- >> -- you do it to everybody. >> right. eventually the bad guys seem to get ahold of those things and you defeat the very purpose you were seeking. >> i know the government frequently would argue, listen, we're only after bad guys, you know. if you didn't do anything on your cell phone, what are you afraid of. that's the argument that's

historically been the slippery slope. obviously i'm not condoning it but it would be a great to know what's on the phone but make it so the government couldn't listen to everything. the government listens to everything anyway. >> it's a continued debate that's gone on since 9/11, the patriots act, this bans of trying to ensure safety and at the same time trying to make sure we keep the key fabric of our democracy. >> i couldn't imagine tim cook doing anything else. >> it fits with his character. you always say don't trade am. own it. now we've got icahn and ihorn. >> you know this stock to knicks the tragedy and whatever happened with the fbi and the government, but the stock broke out technically, and that's been

a big issue and it would be something to see this buy which obviously is on the other side of when you have those orders of einhorn and icahn selling, you're not allowed to talk about it. sell orders, you don't say, go tell your friends enthusiasm you've got $12 billion. stocks are down. people are saying, wait a second, this is going to hurt apple, the fbi issue, whatever. the private security issue. i do think you have to go back and say this dog has been in the doghouse for a long time. it's a cyclical now and they're getting a bit of a hype. >> to your point is there a return of capital or do they increase the dividend again? are there expectations that will be built in? >> you go back to what lowell

mcadam -- who's going to be the jikt of ridicule after i speak to john legere. maybe ridicule is the price for doing okay but they think the iphone 7 is going to be gigantic. you have one more quarter everybody's worried about. when you worry about one more quarter, the stock doesn't go down. they don't really need it. they have enough firepower. any time they've had more firepower, stock jumps. it create as scenario where you want to own apple and buy apple. i always say own it. by the way, tim and company, this did not adjust when i was there, but my phone did, just putting it out there. stocks are aiming for their first three-win rally. economic starts unexpectedly down in january. the commerce department cited bad weather and then the

producers number surprisingly up one last month. all of that after the release of the fed minutes due out this afternoon. santelli said he could hear them jumping around on this core number that maybe their 2% target is on the way. >> well, i think that you have to understand that the food costs have come down since that number. i mean one of the things i've been dealing with. if you watch tyson foods, the raw cost of feeding chickens have come down. i know hormel has been talking price issues. but in the system i believe the fed will be able to say this is as temporary as oil. the problem is i don't think oil's temporary. so that's good if you believe that there's going to be deflation. but i warn people this number is as true to a short term burst as others but the additional ad complex has been falling apart, all right? falling apart. >> what does that mean?

>> the farmers. well, farmers never die in this country because they get a lot of -- they get a lot of aid. but if you're looking at farm equipment. i hadded adco on. i was trying to be positive. that's one of the largest farm equipment companies in the world. >> the broader market right now given these, what, last 2 1/2 days, are you a buyer here? suddenly we're not as worried about negative rates. deutsche bank bought back some of its bonds. >> how about credit agreeco. >> china came out. >> china was supposed to be down. when i was away, unfortunately every single person was a hedge fund manager with my wife saying

could we one place find where it's not all hedge fund managers. i don't think you can. i love motel 6. >> those managers kent go where you like to hang out. >> they said wait till china opens. wait till the french banks collapse. i'm waiting. wait till glencore collapses. they got na nice credit line. wait till freeport defaults. they got a billion dollars. they've got a lot of balls in the air. and may i say it may not be too early to buy on groupon. >> really. >> yes. i'm going after possibly groupon. >> well get to that. the three ceos. ♪ ♪

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getting to breaking news on production. let's get to rick santelli. good morning, rick zbhood morning. we have a good number here. it's up 0.9. even though we garnered it on this number, we lost some. on utilization rates, 77.1. that's almost half a percent higher than we were expecting. last month downgraded a couple

of intelligents but not so bad from 76.5 to 76.4. so sequentially 76.4 up to 76.1. how is the market fairing? not much different. 1.81%. of course, everybody's not only paying attention to that but the hotter ppi or cpi will reflect that, we'll have to wait and also the minutes later in the session. carl, it's all yours. >> we'll see you in a little bit. rick, thank you very much. meantime t-mobile up. profits tripling as progressive promotions did ad some customers. jim will have a live interview with john legere of t-mobile. we're looking forward to that. >> one of the things that's a hallmark to t-mobile is he continues to increase his coverage which is very good.

if you own the stock you'll be happen to see the term is down. i believe the ebitda is a great. so you start wondering how long is this company going to be able to stay independent? >> what do you mean how long it's going to be independent? >> there's a lot of people that want to be in this business. >> i don't know. dhienlt ne they don't need it but sprint is waiting for another administration. >> right. i think that's exactly what i'm thinking. >> that's still deutsche telebeing in control. beyond that you're referring to cable companies, this idea? this murmuring? >> yes, yes. >> i just don't know. there's a proliferation of hot spots all over. like urban areas where we're converting phone booths to wi-fi hot spots. and you can use your cable

company to make phone calls without using your wireless carrier and at some point that may start to represent something for the cable companies and be a reason why comcast may be like, we don't need to acquire t-mobile. >> that's interesting. i think they feel the heat. i think they feel the stocks have got to go higher. it may just on the earnings alone. what i find always amazing when you see these numbers. verizon's gaining customers, at&t is gaining customers. sprint has said they're gaining customers. >> so who's losing customers? >> although there are other connected devices. sometimes you have devices versus people. >> good point. >> you've got your tablet and car and different things being connected now. >> you're right about that. >> it will be interesting to see the evolution of this in a few yearses as far as pricing plans.

we may be paying 200 bucks a month but it's for a family. >> sprint has the lowest family plan but right now t-mobile is argumentative limited time only the same deal. it's very hard when you look at the different plans to try to size them up. it's almost like they make it so you can't figure it out. >> they keep playing these drinking games. i don't know if he'll want to do that whelp he plays with you later. he sent one yesterday. no alcohol. they send high-caffeine drinks. >> i had my first beer since december 24th. >> how did it taste? >> i had red stripe. it was killing me. i passed up that corona and the other. i're got to play that game.

>> your interview is at 10 something. >> that's early. >> and you don't need caffeine either. >> no. i don't need peer or caffeine. >> yet you take something. >> yes, yes, i do. >> we'll get crime 'eers mad dash and take a look at the opening bell as stocks try to make it three in a row. more "squawk on the street" straight ahead. the future belongs to the fast. and to help you accelerate, we've created a new company... one totally focused on what's next for your business.

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can a business have a spirit? can a business have a soul? can a business be...alive? all right. it is that time. time for a mad dash. we have about ten minutes to opening bell. >> can you believe it's wednesday? >> no, no, i can't. >> yahoo! wants to be able to stream its annual meeting. he bought 25.5 million shares of

kmi. why is this important? they slashed their dividend gigantically, 75% right here. this is now the first one that is trading pretty much at or above depending on where it is right now after they cut the divide dividend. that's very important. people said once they cut the dividend, they're finished. warren buffett said after they cut it, they were finished. why? because he owns some. i still say that if oil stays down and natural gas stays down, you're going have a lot of problems and i still wait for the energy transfer. equity deal, of which, by the way, meryl said some bad things about. buffett never comments. >> yesterday they also owned kmi, jim. you're not getting that big dividend deal but rich kinder was the first or very early to say, okay, we're getting rid of the dividend.

>> right. >> significantly. we're going to make sure we make our interest payments, he made that decision. others have now followed but there's still a lot of questions about still other companies. >> this would be interesting. you cut it and people are back in or buffet is back in which gives us faith. it's not an international partnership. it's a c corp. this is owned by rich people and they've been bleeding and i just wonder whether some might say if oil goes above 30, this is the group to own. of course, the yields have gotten preposterously high. i want to be mindful. please, understand the oils are inventory, it could still come down. >> what's the growth story if there's not a dividend to support it with a stock low off of 12 or lower? >> it's pretty interesting. we don't have enough. we just don't. we have enough oil pipe but natural gas is not distributed correctly and it would help the utilities. >> did you see the natural gas

prices yesterday? below two. >> there's one or two companies that make money in it. >> what's the cost to transport that stuff? >> no, no, no. how do much do you think they make on the canadian oil sands? according to rbn, they're losing two bucks per barrel. there's a position you want to be in. making it up in volume. >> all right. we've got a lot to cover. opening bell is about four and a half minutes away. stay with us. "squawk on the street" will be coming right back.

you're watching cnbc "squawk on the street." the opening bell in 90 seconds. a business morning with inflation data out and earnings and the fed minutes this afternoon. we're just getting word that a meeting of oil producers in tehran has come to an end and we're awfully interested, jim, to hear whether or not they're going insist that their production levels should be

taken back to presanction era. >> they've said over and over again they're going to do it. so i don't know why they would suddenly pull back. remember, the deal with russia and saudi arabia is they have to pull back in order for them to level off the production. this was the equivalent if you ha you're low on oil or plan to sell oil. so the idea that oil went up on this is fanciful. i don't know any other way to put it. it's fanciful. my friends who are in the oil business of who fortunately are many are like, now, what are we going to do? they're hopeful people. i'm hopeful. i'm from philadelphia. we are always hopeful. 76ers, 2020. we've got plan. >> we've got plan. you're on a good road. 20. >> a ring for the sixers or $100

oil. which comes first? >> oh, wow. oh, man. that's a tough question. >> you ask a tough question. >> high for crude today was $30.31 if you're interesting. there's the bell. at the s&p down at the big board we welcome the veterans of the artillery in the state of new york. stopping by to ring the bell genetic life company wave life sciences. 1263 beats 1180. >> you know, when expedia had good numbers, they were absolutely saying, look, hotel bookings are strong. they still shorted priceline. this is so overly shorted. this is a great kpaechlt giets a great hotel business and i think people say, oh, the strong dollar is going to hurt them. zika is going to hurt them.

i don't know it's good company. they have continually bet against, continually deliver. it's almost as if no one listens to how good the company really is. >> that's going to be your top s&p gainer with kinder right behind as you guys discussed a few moments ago. garm garmin, 9% earnings. >> not as bad as expected. have a couple. fossil is not as expected. these have been annuitity shorts. fossil, garmin. bulls make money, bears make money. things get slaughtered. maybe i stayed short gar money too long, maybe i stayed fossil too long. overall pretty good breadth here. we've got the deutsche buyback and they're saying don't know rush operate hikes, obviously

oversold levels, negative sentiment. those are some of the reasons they're trying to explain the last two days. >> we've got to a guy who's calling for higher bank prices. i don't know if he knows -- cash carry. talk about breaking up the banks. if they broke them up, they would trade. obviously every single ceo of the bank is going to e-mail me saying what a knucklehead you are. i'm not being totally facetious. when he says banks are too big to fail, he's still too big. he's a very sophisticated guy. the discount to book value is unprecedent. >> yeah. neel kashkari, you may remember when he was young he ran the ta t.a.r.p. prachlt his age had nothing do with it. he ran for governor of

california. he's president of a financial bank in minneapolis. he's on a media blitz. the headline has been and i think we may have it that he's calling for breaking up the banks in his believe that the government should not have to step in and bail them out again and if we had a stress tech environment that would be the case. do we have it? let's have a listen. >> i want to be honor west the american people. yes, progress has been made but if we have a stressed american market the government is going to have to step in and bail them out. i don't think that's an answer people are going to find acceptable and now is the time to consider more transformational solutions. break up the banks is one of them. some mentioned turning them into utilities by putting so much capital in them that they can't fail. >> that's disastrous.

making them utilities. utility doesn't work. tax obviously is a nonstarter that. i could print the capital markets. the idea if you were -- horrendo horrendous, horrendous. >> the performance of the stock is horrendous. >> they're saying, cramer, i wish you'd shut up. like at the book value which is 1550 and i say i don't know how to get it up there. obviously kashkari, if he were to get what he wanted the banks would trade down. there would be no reason to own the banks mchl a. many are frustrated why can't they do their own help. >>'ve heard you say two things. the stocks would go up if they broke themselves apart. >> i think jchl p. morgan --

it's a well oiled machine. but i am trying to figure out -- i'm using cash carry as an analogue to say how could they be at such a discount? how is it? do they think the book is phony? why isn't that company on air, brian moynihan on air saying, you know what? this makes no sense. why isn't core bat on here. i happen to like both gentlemen but they're rarely on. >> stump was willing to come on and talk about anything. >> even jpmorgan, you know, has not outperformed the s&p. >> jamie diamond of speaks and brian moynihan strangely quiet.

i'm telling you as a guy who follows the media, moynihan and corbett. i bet your stocks would go higher. >> here's kashkari. 80 years from now we'll look back and say have we done what we should have or just made changes around the market. is dodd/frank enough? >> dodd/frank has made it so that you have this incredible thing. the bankers won't buyny stocks. if you ever see it go down there's no more what's known as principipa principal. >> there's no inventory. the lack of liquidity has been mentioned so many times not just in stocks but bonds but in a lot of different markets. it's a point we should make more

often, i think. these banks do not have -- are not making markets they once did. >> and they're not going to have return on equity. but i think michael moynihan. they're going have to listen to me on this whether they like me or not. they won't come on. that's a mistake. look. i've told them. you don't come on, no one believes your book value. you come on, you get questioned. suddenly you have credibility. do you think jorch stumpf -- why does he come on? he knows the confidence level of his own bank. he spent more time talking about the bad loans than i thought he would. there. i've made my pitch. i'm not booking these guests on my show. no. look. i'm being facetious. bank of america is beside themselves.

what they ought to realize is transparency and coming on saying, listen, here's the book value. merrill lynch is worth x. >> the book value is very low there. >> but essentially what you want is for the industry to start speaking out against these policies. >> they're still like -- they're in the bunker. get out of the bunker already. mine come on. the west isn't part of it investigating you. the government are s not interesting in what you're doing. almost every sincele piece of litigation has been resolved. now, their earnings weren't that good, but bank of america, their book value -- the disparity of the back value and where it is is extraordinary and i'd like to know from the companies why that is. man they have a reason. they don't want to come on. and when you don't want to come on, what that says to me is, hey, what's going on there.

what's going on. everybody comes on. everybody comes on cnbc. who doesn't come on. those are the two guys that won't come on. what is that about? >> all right. okay. come on. >> all right. bernie sanders says he's delighted. >> bernie comes on. >> kashkari was a goldman sachs guy. i'd be curious to understand it. maybe he saw the big mobile shorts an tops. >> he lived it. >> yeah. >> he's a very smart guy and he knows a lot but i do think some of the banks -- if i were kashkari, they're not talking. they're really big. more than 10% rule that the founding fathers -- >> acquisitions that took place, whether it was washington mutual by j.p. morgan or bear sterns.

>> or wells doing the big deal. >> now they want to break them up and obviously the bankers are like, why would you tell me you can do this. it would be a taking, a fifth amendment violation. i do think in the case of bank of america, i don't understand it. i just don't understand it. >> we have the s&p back above 1900 for the first time in a couple of weeks. bob pisani's on the floor. hey, bob. >> good morning, guys. i'll tell you what's more important. we've move 100 points in the s&p since below thursday afternoon. 100 points. we were talking about 1812. remember the jokes about the 1812 overture? we're on our way to a three-day rally. we had a two-day rally. the best since august. there have been no three-day rallies. the last was december 23rd.

this would be the first of the new year. you're going to hear a lod of talk. there's been so much damage done it will literally take weeks to sideways the movement to convince anybody although it's a nice start here. look at the sectors. good to see the financials leading again. energy also up. consumer discretion. look at what's lagging. we made a big thing about utilities. i said if the market starts turning around, they're going to sell utilities because they were so overbought in the prior weeks. it's a mixed session in asia if you take a look. shanghai is at a three-week high. a lot of jawboning about the yuan. everything's up about 2%. we're being led again by the financials. deutsche bank is up by another 5%. if you put that up, 4% to 7%.

deutsche bank up $15 a little while ago. sew sigh tg societe generale an santander, the usual suspects. just put up the last. friday and saturday and the last two days and the close yesterday, citi, jpmorgan, all double-digit gaines. you can add 1% to 2%. citi is up 13% since the close on thursday. these are very significant gains overall for the markets here. important thing is -- other important things, heavily shorted names have been rallying notingly bli -- notably as well. look at this. we're talking 35% gains here in the last three or four days and

we haven't had as quite a spectacular gain. alcoa, console, some of these other names have also had nice rallies. not like freeport but nice overall. >> speak of energy. they slashed their dividends 75%. remember con co-cut theirs last week by about two thirds. that's definitely a loser today. finally, think what i's interesting about this is we don't know where they bought this. remember with kinder more garngs kinder morgan went from 30 to 15 in the fourth quarter and that's roughly where it is now. whether that's a good buy or not is exactly around where they bought it. we don't know exactly that right now. dow's sitting on the highs for the day. back to you. >> thank you very much, bob pisani. we did get a bounce in the

ten-year yield. let's get to rick santelli. >> good morning, everybody. everybody was kind of whiny. look at the data points today. i ask you. look at it. we are above that. maybe the most important thing is it's about a big 28, 28 basis points. bob references thursday because it was a wild session last week. aisle reference it as well. we had an intraday low yield at 152. we settle at 66. we're currently at $180.81. we're close to 80 basis points for the intraday low. the day we were trading i found it half a capitulation. i call it half right. it could have been total capitulation.

let's look at the january start. i tell you, it makes sense. if you look at the bottoms if you open it up to march -- let's make it august of 2011, dive this on the santilli exchanges. see all the 5s? all the others caught up and they moved higher. if we want to look at boon yields, let's start at march 2nd of last year. almost a year ago. you see the left side and right side and acknowledge we stopped in the low 20s even though the intraday trades may have been more egregious, in the end it may have pausd here. is it going to stop. i'm not sure but negative rates is very contagious and unfortunately not very good for the activity it's being used to acknowledge or address. if wi look at what's going on in the foreign exchange markets. let's start out with the

dollar/yen, 1.14. took years to build. i'm not sure it's over. finally a july start to the euro versus the dollar. this one is interesting. above the market, 112 to 115. there's a lot of wood, okay? you can fill fireplaces across america with it. tech nickians means a lot of wood means you're going to spend a lot of time there and not get through'dly. that's the area where you want to really defend. back to you. >> thanks a lot, rick santilli. when we return, jim cramer's interview with t-mobile's john legere and we'll talk with lucas films special effects division. dow is up 108, s&p at 1908. we're back in a minute.

we continue to cram in a lot in a short trading week. >> walmart is on fire. that stock, they report again tomorrow. people are getting very hopeful again about this group, and this group has been a market leader and then just been horrendous. this would be very supportive of a stronger market if you saw nordstrom and walmart still be able to power higher after they report. they have to be the most important reason. >> of course, the quarter included that warmer weather. concerns about all that inventory getting liquidated. >> true. i just marvel that there are people who believe these stocks are directly related to employment, which is stronger, and people just say, you know what? i believe these stocks have gotten too cheap.

nordstrom in particular when it went to a 3% yield. i happen to think nordstrom is a good company. i am saying i noticed the mood from that very disappointing quote. >> he calls it bizarro world. >> look. when batman goes against superman. what do you think? >> i think superman wins. >> really. >> that's what i have a hard time getting around. he's superman. he's -- batman is just aman. >> i thought he was superman. by the way, disney, look at where their stock was after they report thad so-called horrendous quarter. >> 94.46. there was a quote in the tv

ad revenue. >> internet is doing well and ads are doing poorly. to notice those movies after they've been stark, they wrote off retail. these are things worth watching if the market is going to make that 18.12, 19.12, if it's going to break out. >> we'll get stock trading with jim. it would be nice to do that again in a moment. dow's up 21. don't go away. hundreds of crash simulations. thousands of hours of painstaking craftsmanship. and an infinite reserve of patience... ...to create a vehicle that looks,

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it's time for cramer at stock trading. >> when they say buy etsy in the quarter, i'll be speaking with them. i'm running a panel tonight speaking to some of the big brooklyn companies including etsy. i'm not kidding. they've reached a point where they're too cheap. >> why? >> it's a lot easier to use the site. a lot of people thought amazon would put them out of business. that's not going to half. i think it represents the future. it's been bottoming for a long

time. don't want to miss the bottom and a couple of other big companies including steiner and brooklyn brewery. a lot of interesting companies in brooklyn. i do like this site. i have been negative when they're doing the right spo. it's hard to dislike that. >> we'll watch that. meantime what's on "mad money" tonight? >> dr. david agus. health i.t. i.t. has been terrible. that has been one of the worst groups. very disappointing guidance. let's find out what the future is with health care and technology which has not been guide.

the oil has been a great. i see things i like. let's hope doug mcmillon, the ceo of walmart. maybe he surprises. >> stocks up. >> i've been to walmart recently. it's walmart. walmart's walmart. >> you're notice going to be going anywhere. you're going to be back with a live interview with john legere. >> o', i for goat. >> and also john briant and darren huston. and why stop to find a bathroom? with cialis for daily use, you don't have to plan around either. it's the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night.

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welcome back to "squawk" on the street. i'm carl quintanilla with sara eisen and david faber. oil's helping out it's a big day for us on "squawk" on the street. geefrt a triple dose of ceos for you starting with an exclusive with the ceo of kellogg and that

stock hits record highs. find out what the top cereal maker is facing right now and how they're taking on the competition. >> plus the ceo of priceline will join us for an exclusive from amsterdam as they top wall street estimates. >> and jim cramer is going to sit down with john legere. it's sure to be a fiery interview as it always is. the ce of of apple refusing the court's order to allow the fbi in. >> apple's response is clear. tim cook saying in a statement we feel we must speak up in what we see as an overreach by the u.s. government. that was tim cook's response to the judge's order demanding that the company unlock the i phone of the san bernardino shooters.

the fbi is investigating the terror attack that left 14 people dead. apple saying it's already helping the government in a number of critical ways. it's making the engineers available to the fbi and it's providing data when requested and when the company has it but cook is drawing the line here. he said the fbi is asking app toll make a new version of the i phone operating system which would circum vent several important security features. call it what you want, cook says, that is a back door and while the government can argue its use would be limited, there's no way to guarantee that kind of specific control. cook saying the message to customers is the government is asking the company to hack its own users, that which protects our customers including tens of millions of american citizens from cyber hacks. the same company who provides

strong encryption would ironically weaken the same and make it less safe. that's been cook's position for some time. that it could be exploited by a number of bad actors from criminals to foreign governments. the question is what happens next. apple is going to challenge this judge's order. the next battle you'll hear about will be in the courtroom. guys, back to you. >> what do we think is going to happen next, josh, there? what is the next installment now? >> the next installment will be apple is drawing a clear line in the sand. the next phase of the bat ll be moved to the courtroom where apple has made it clear they're going to contest this judge's order. >> thank you very much. meantime eamaeamon javers has m.

>> i plays into this long-running debate over the encryption in the country but what the fbi and the department of justice are arguing now, they simply have to have this particular piece of information because it might tell them who they were talking to, what he was doing in thours and days tht led up to the terrible attack we have some of the details whoof's 's in it. it would by pass or disable the iphone's erase function where it would erase data on the phone where if you try to get too much access to it, it would get access via support or bluetooth or protocol and would ensure it won't delay their attempts to enter passcodes. what the fbi is contemplating is

entering passcode after passcode after passcode until they get in. they want the ability to be able to enter those very quickly. if the software delays that it would be impossible to get access. clearly, guys, a big standoff between the u.s. government and apple that eamon, this is not a new argument. this has been simmering for a very long time on capitol hill is. there a feeling that the fbi and doj waited for an instance that would be the least defensible, i.e., when you're dealing with a terrorist in this country? >> you're right. this question about whether we have encryption in this country. what tech companies should do. it was very abstract until today. now we have a real case of a real terrorist who actually killed americans on u.s. soil

and an american tech company says, no, we're not going to do everything to get access to this person's phone that. make this argument quickly. you're right. the fbi and the department of justice have been arguing for a long time that they want access to this kind of encryption and this case may be a real make-or-break test case on whether or not they're going to be able to get it simon. >> something we're going to be talking about obviously for the next several weeks or months. thank you very much. >> meanwhile stocks are in the green. oil prices are rising as they wait the latest fed minutes which might possibly fuel a posz to rate strikes. good morning to you both. >> good morning. >> barry, last week at this time it was all about the prospect of

negative rate. what explains the last few days? >> well, i think the fed pulled back on their 2015 rate hikes and china resumed their stability which showed they were not going to exploit deflation to the rest of the world. so those were the two key events last week and on monday. >> so why does it feel then, barry, like no one believes we're going to take this much farther than mid-1900s? >> well, we'll probably get past the mid-1900s but we're capped. china does have some problems. they need to maintain some semblance of stability. how they manage is going to take it to a directional point. >> samantha, do you believe in

what barry's saying? >> we do. we think bear sentiment has gotten a little bit out of whack. i'm nothing going to say it's irrational but with the sell offwe receive, we don't think it's justified. >> as far as the economic data, if you look at producer prices and housing data, they wrote, well, the market's got it wrong. we're not heading into recession is. that how you interpret it? >> we had the first big leg up. could we get another big leg up? that could get it again. we saw what that did. i thought the data was more weather related than anything else and we'll see how the first half data flow goes but i don't think it's going hike in march but toward midyear or second half of the year, we'll have to revisit that. >> barry, when everything is

headed down or a sea of red, we look at those as signals and sometimes we're not aware of what's prompted the selling. one of the members of the ecb and they're looking to prop up the banks there. he said overnight the brazil, russia, and china are not only leading to the overall deficit they're looking at emerging markets in particular site funds to sell and i wonder if perhaps we missed it and he's right and that is the eye of the stormful we just can't see it on the days of red, what do you think. >> it's still a u.s./china control. they have a lot of control over where the dollar goes and china's policies also affect the emerges markets. and a lot of the states you name to a degree serve china's interest. so if china can't grow, they're going do poorly. really it's a u.s. china show at this point. >> samantha, talk to me about

stock selection. some of these 13 fs show they have started to nibble. people are still very interested in yield this year. how do you work value versus momentum and growth this year? >> it's interesting. i think it went against many expectations because market participated were expecting rates to go up. we're holding through with our sector selection which is based on the consumer and the strength of the consumer wchl dough like tech. and with the amount of selloff you've seen the evaluations have gotten more attractive on a lot of those names. >> ahead of the fed minutes released at 2:00 p.m. eastern, do central banks globally still have it? there were a lot as to whether they still have marketed and wherever they have faith in their efficacy and policy.

what do you think? >> i think that's a good point. he said really governments at some point are going to have to step up because it's not clear central banks are going to be able to support the market to the same extent. if there's one thing we learned, they do not react well to knellive rates. >> out of the producers they say that raises hopes for the meeting later this summer. does energy look interesting at all to you? >> nonopec production is showing signs of growth but i worry about this production. maximizing output is not particularly helpful. we do need demand and we have to

wonder about supply on the shiite. barry banester at stifle nicklaus. and sarah. >> when we come back. the ceo of priceline darren huston will join us. as carl mentioned the dow is up. "squawk on the street" will be right back.

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the markets continue. the longer that the bulls will argue there will be less of an effect from the volatility we had previously on the economic situation which in and of itself is slightly sell-fulfilling. currently up 186 points on the dow. carl. >> best since late august 2015. when we come back, jim cramer sits down for a first live cnbc interview with the ceo of t-mobile john legere. can't miss. that's after this break. don't go away.

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course? what did you think of today's starts down 3.8%. >> well, the third durable recovery with escape velocity that was predicted at the giving of '15 is turning out not to be as such. in fact, starts were what we already know. in 2015 builders sold under 500,000 houses for the eighth straight year. anything under 700,000 is a recession. anything under $500,000 is a depression. so take a look at starts. ire down, kind of bobbling around. single family is obviously the most important bus it takes a lot more to build one house or 100 houses than 100 apartments but the year-to-year change now is contracting which is the theme for 2016. remember, rick. last year we were against a hangover so anything looked good. last year the demand numbers

were relatively weak especially if you comped them to a better year like 2013. going forward in 2016, we have tough demand comps. have tough price comps. mast, prices are back above record highs, rick. so this is the year. >> i tell you what, mark. as i listen to you. i zrach my head. housing is listed on that list. when everything else is softening, manufacturing, it's one of the trophies that's held up. >> you're wrong. >> is it like what we hear in politics like appointments? it's the opposite now, can we not put any stock in the soothe sayers of the economy? >>. >> the home builders are the purest indicator of end user shelter buyer demand that we can see because existing sales, resales are buoyed by all of the funny money unorthodox buyers

like the institutions with their buy it or rent schemes, the private investors chasing institutions to flip and to rent and foreigners with rich currency relative to the u.s. dollar and high-tech in energy sector growth in the past couple of years where people clustered around certain arias. all those pillars that i just mentioned now, rick, are going away and the housing market is reverting back to the end user shelter buyer who for the last tell years has not come out to play. >> all right. in the final half minute we have left and let's go quickly. i guess in the end there's a mismatch and i guess it underscores malinvestment. finish it up by proving, just by looking at housing how much there is. finish it up, 20 seconds. >> well, in the single family builder section, there's very little investment at all. so there's not malinvestment. where it came into play was turning housing into a bond

replacement trade by unorthodox capital that drove the unorthodox demand. housing turned into something other than a place to live. that also happened from 2003 to 2007, rick, and i don't think the end result of the past three years of malinvestment will end up much differently. >> mark, thank you always enlightening. let's go back to the "squawk on the street" gang. and thank you, mark. >> rick santelli, thank you very much. straight ahead on the program, shares of priceline having their best on the company's big earnings beat, the stock rallying substantially as you can see up 11%. the ceo darren huston. he'll join us live from amsterdam when we come back. the life behind it. ♪ those who have served our nation

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i'm sharon epperson and here's your cnbc update at this hour. four stealth fighters flew over south korea to show force against north korea. the military would not say how long they would remain deployed. it's a clear signal the north korea will pay a harsh price if they don't take the path of a peaceful co-existence. china has missiles on their

self-made island as a show of defense. at least 100 trucks of humanitarian aid were preparing to set off for besooeshed areas. they have proven assets. the best in show winner at the 140th westminster dog show is c.j. a german shorthaired pointer from california. the two-day event in new york city drew nearly 3,000 dogs. about 200 breeds were entered congratulations to c.j. and that's our cnbc news update for this hour. back to you. >> thank you very much. sharon epperson. priceline soaring after it beat earnings expectations by 80 cents a share despite the stronger dollar. the volume up 27% of last year.

slowing the usually conservative price line above expectations for the current quarter. delighted to say the ceo of priceline darren huston joins us exclusively from amsterdam. darren, welcome back to the program. this is the best performance of the stock in over five years. is it fair to say the business is reaccelerating and if it is, have you overcome the low or large numbers that you've spoken about before? >> yeah. well, thanks, simon. it's a great to be speaking with you. yeah, we're really happy with the year, 25% growth. we're also growing the business faster as we exit the year than as we entered it. i don't know if you can ever overcome the law of large numbers as a business, but we're really happy with the way it's going and we're looking to a great 2016 as well. >> in balance, of course, for contacts coming into the earnings, you've lost about a quarter of your marketing like

many of the stocks have done. clearly you're impacted by the stronger dollar. that nowadays goes without saying but are you seeing the macro-economic problems that so many people are fearing in the markets at the moment? >> well, i think, simon, travel significantly benefits lower oil prices. we're seeing in particular that macro effect having a positive impact on our business. generally it's a pretty healthy travel environmental. certainly the terror in paris and issues that people see in syria and turkey, there's pockets of issues around the industry, but generally it's very positive. >> you know, just on the subject of your executing. you've seen on the conference call this morning to be more strident than i remember you. you took a strike at expedia saying you're book twice as many

nights' accommodations as your rival. i wonder if there's a reading between the lines of frustration on your part that people don't understand what you're doing. when you took over, i think there were 4,000 employees. how many do you have now? >> we're actually closing on 16 now, simon. i've been in the priceline group for two years. i've been running booking.com for 4 1/2 years. yeah, it's nice to get a little bit of recognition. we're a quiet company. booking.com is not a household name in america. we're an american trade and stock and it's nice to get a little bit recognition. we're the world's third largest. it may be a surprise. they may think of priceline and priceline.com and we have six amazing brands.

have booking.com and openen table and kayak. >> you also said every year is an investment year at the priceline year. whilst every year is an opportunity to deliver outstanding bottom line results and i wonder if you're slightly envery envious of airbnb and othuber. the urban myth is he joined with something to the effect he could have an unlimited budget. something you'd be hard-pushed to grant. >> yeah. it's one of the big changes. on the other hand, uber, airbnb, they near a different stage of their lives. i'm proud of our model. airbnb in particular is a competitor, but it's also a big

opportunity for the group. we're trying to represent all forms of accommodation. we're expanding into apartments and homes. we're trying to make them as easy as booking a hotel and i like where they're going. they're actually helping us in the short term. but i obviously look forward to a time when everyone is held on a level playing field and we're proud of what we've done. >> they have a users fee or are instituting a user's fee. you still don't have that. is that sustainable? are you cross-referencing that from the others? >> no. simon, what i would say we're proud of, we're trying to create a low friction model. people care about fees. ours will always be free. ours is instantly confirmable. and we want to make it so that if you to new york, you'll say,

oh, do i stay at the marriott door i stay in this independent hotel, do i stay in an airbnb or an apartment. our strategy has been to have the most rooms and a greatest selection and book the room that fits them the best. that's why we're building it out this way. i think we're playing to the long-term winning model in this industry and i'm proud to say we're making a ton of progress. >> you sat on the sidelines while expedia seemed to buy again and again in the spachlts one of your open acquisitions, open table, has been a frustration that it didn't expand internationally. i know on the conference call you were saying, look, we've changed the management there. what will the difference be in the way it's presented to them as we move forward, do you think? >> yeah. i mean open table. what an outstanding asset. when we bought open table, we

knew there were issues. we need to instill a performance culture there. the website, the product needs to be more global. it needs to be as good as booking.com, as proud as kayak. and i'm proud to say we're making a lot of progress. americans couldn't use their american app to book in london. we just fixed that. they sound like little things but they're really big things. as we work to globalize the product. all the a great things that make a great web products a great you're going to see them to improor. not just in the united states but ultimately everywhere in the world. it's good to see you. thank you for your time.

jo darryn houston from amsterdam. >> oil moving back near session heise above $30 a barrel amid new comments from iran's oil ministry characterizing other meeting with oil producers as, quote, good and he ploets in effort to stabilize the oil market. art cashin joins us here at post niep. is this broader stock move about energy? >> in a large way it is. we're at a really critical juncture here as you pointed out. it's important that it stay up in that level. that's also taking the s&p up to what looks like some critical early resistance at 1920, 1925. >> is it a good thing that we're seeing consumer discretionary, industrials, financials take the lead, the really cyclical stocks tied to the economy? >> it's good. yesterday's rally was rather brought and that's helpful, but

they did manage to rally the things that have been battered the most. so that tells you some of it is short covering, but we'll take any kind of buying we can get. >> in the meantime the safe havens no longer in demand. are you a believer or is it a bans from oversold conditions? >> we've taken it forward. i won't declare in until we talk about 1950. >> but if you've put a floor on oil because materially that has changed. there has been a meeting between the saudis and the russians. but clearly there is a discussion and potentially a framework moving forward. that makes it quite dangerous to short oil in this environment. that in and of itself can put a point on the market to the point you've made it time and time on

the program. >> i think it is. oil was heavily shorted. while i don't think anybody seriously believes these talks are going to be fruitful. the very fact that they're there and you run a risk and if you're a short, you want to decrease your risk portfolio. >> finally did wholesale prices do anything about inflation this year? >> not much. i think it's temporary. >> and transitory? >> yes. to use the fed's words. >> transitory is lasting a long time. >> yes. no, i think we'll have to wait and see. i think there's a lot still of a headwind for the fed here. i still am of a mind that they will not be hiking very readily, that we'll see zero before we see 1%. >> we have boa joining goldman and taking down their number of

expected hikes from 3 to 2. >> what will you look for in the minutes today? >> i'll look for -- i guess the ideal thing would be to get a kind of dovish tone that they're, you know, looking at the headwinds, looking at the problems, et cetera, et cetera, and see how much they look like they're -- i don't want to talk. >> that would be a good thing. >> she recognized the turbulence and uncertainty. thank you. >> thank you. when we come back, jim cramer's interview with ceo of t-mobile john legere. that's when "squawk on the street" comes right back.

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welcome back to "squawk on the street". check out what's happening with stocks right now. the s&p up. as for stocks, they're trying for this three-day winning streak and utilities are sticking to the downside, the only downside sector today. it's this year's second best performer but currently the only one in this morning's trade. among the names weighing utilities down. con ed, duke west. utilities, again, the only sector call today in the red. back over to you guys. >> dom, thank you very much. t-mobile shares up after beating earnings. let's get over to crimer who is

at the new t-mobile store in times square with john legere. hey, jim. >> ah, thank you so much, carl. yes, with john. this is what's really important. a great quarter, but we're talk about something earlier when you and i and dave were sitting down which is where are all these customers coming from. john has another view. >> i was sneaking a peek at you guys talking while i was supposed to do my earnings call. the issue is there's -- a subscriber is not a subscriber so when somebody puts up a number, lately a lot of those have been cars or machines or internet. post paid phone nets are the core of our industry. >> why is that. >> because the average revenue per user is

this is 11 quainters in a row over a million. but importantly we had 19,700. what does that make 3 president 5 million net ads for us. at&t, verizon and sprint together minus 259. think it's an annanly, two years. at&t, verizon and sprint minus 459,000. >> is there one carrier that you're really taking it to? >> you know what? interestingly the biggest donator last year was at&t. at&t contributed to the benefit of the rest of us. 1.5 million losses on the. now, sprint has been kind of a long-term contributor of post paid phones. lately they've had a small gain. so all of them.

dumb, dumber and yellow contribute heavily. >> i spoke i focused on lowell. he talked about his network is faster, stronger, covers better. chose not engage in a beer drinking game, but did not slam the un-ceo. >> well, lowell, i say he's in one of those weddings and funerals jobs hchl goes around. every now and then a customer may walk by. i saw him on your show. he is slightly confused. he was talking about 5 g and it's coming to a super bowl near you. he's about four or five years earlier. here's a big deal. by the way, steve harvey talked about it in our super bowl commercial. verizon has forgive livinged on, the fact that they have a better network. for eight quarters we've been

the fastest 4g lte. it's fear, uncertainty, and doubt and it's beautiful because we're sitting here in the times square store in new york. this brand is alive, our customers are growing every quarter and most poimportantly, what we're talking about, the model works. we had an 11% growth. at&t, verizon, and sprint revenue, down. ebitda, 30%. >> just to clarify, lowell mcadam was actually not that worried about you. in part he made it very clear his coverage is better and his sound is better. you watched the campaign. a ball-busting trip. have you asked the people to try it out and have you gotten any real response? >> oh, yes.

>> no, listen. for most viewers, your quality is not always good. >> is the camera right where jim is? let me help you. lowell is pissing down your leg it's live tv. >> i i'm sorry. he says, you know what? i like those t-mobile guys. they like it. if kmrs like that, they want tootoo. what do they say, i run a serious bu serious business. that's defensiveness. >> his stock is killing your stocks. >> au contraire ma fr.aire. >> how right have i been? >> we're up. we're up so far today.

if you to your job well today we'll be up again tomorrow. >> it's not exactly my job. now, a very serious issue. tim cook on the firing line basically being asked to violate the confidences because of a terrible terrorist act. where do you come down? >> i come down on he's in a really, really difficult spot. honestly what we've got is a heralding situation where he's being asked to help. we'll see where it goes. i wouldn't know how to advise him. i understand both sides of the issue. i think it's groundbreaking. >> if asked? -- >> it's a hard one we value security and privacy at the paramount basis but the questions right now associated with national security and 14 people were killed, i really don't know how to balance it. my heart goes out to both sides of the issue. >> consolidation.

you've got a network that is obviously vastly improved. your stock stace at this level. how do you not get balled by someone? >> for me right now what i said, i want people to continue to think of this. all content is going to the internet. all internet is going mobile. that's my paradigm for what's happening. that will impact not only us, we do one of those things really well. we acknowledge binge on. this has implications to the cable players, the content providers, the carriers. what we're going to do is either aggressivemy move forward or consider partnerships, mergers, or other ways to play. >> so you're not anything. >> what we're doing is we're not waving a flag saying, oh, come on, help us. we need consolidation in order to survive. somebody else is doing that. we can play this game multiple ways. when you think about content to

the internet, internet to mobile, you can see how this brand and this company could possibly do broader things with others as well. >> how big is the apple 7 going to be for you? >> it's always big. i know you is a good relationship with apple. have you seen things that are going to upgrade? >> you know, i have seen nothing. i can tell you when a new apple device comes out, it's a major moment. it's a switching event. it's not only a big moment for our customers but a big event for our other customers coming to t-mobile, so bring it on. in the meantime cash going up, ebitda going up. do you need more money for more specs, more build-out? >> we have done a couple of significant fund-raisers. we're in a period. we've made it very clear we come

to play and we hold that position, but we're very good. again, jim, we had 30.2% year-over-year ebitda growth. we had an adjusted last question, anheuser-busch, consolation brands and also corona, big supporters of yours? this is about the beer drinking game. >> i didn't say beer drinking. you put it in there. i said drinking game and i used red bull. listen, it was a way to take an otherwise extremely boring event and get people to participate and learn more and it was well received so we did our own drinking game for us today and the score by the way was 14. if you listened to our call today and play the drinking game you had 14 drinks so i hope it was --

>> i understand. otherwise i would do the rest of my job. john ledger. the unceo from the un-carrier t-mobile. back to you guys. >> the dow now up 217 points. up next, the ripple effects of the oil glut. more on that after the break. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. (announcer) need to hire fast? go to ziprecruiter.com and post your job

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>> surging 30% after posting better than expected fourth quarter earnings despite a drop in profits and revenues due to currency head winds they cited sales increases with growth in online sales. down over 50% and just about a year ago it was a $99 stop. still a big pop for fossil but a longer term down trend still. >> cut more than in half. the rail industry is taking a pretty bad hit. morgan is live in linden new jersey with the details on that story. good morning, morgan.

>> hey, sarah. good morning. so as oil prices have collapsed you've seen crude by rail volumes for the biggest railroads tumble as well. we have seen those come off nearly 25% since reaching a peak of just over a million barrels per day in the third quarter of 2014. that's contributing to slump and profitability of the railroads but also beginning to effect leasing companies like greenbrier companies and industries and gatx. we have a spot market for crude that shipped by mail and the oil still moving this way is tied to long-term contacts. so many are beginning to start rolling off next year so unless you see oil prices recover that could mean they continue to keep falling. that's pressuring demand for rail cars. backlogs have already fallen 20% from their year ago peak.

according to justin long but all of this is not to say that we haven't seen winners in this process as well. particularly that's been true of grain shippers. so over the last two winters when oil trains still took precedence in the dakotas many were suffering steep delivery delays and they're actually facing a rail car shortage. that dynamic has reversed. it's not to say that the grain markets aren't facing their own head winds. there's a number of them facing the markets right now but railroad gridlock is no longer one of them so overall for the shippers that are still doing business on the rails many of them are enjoying faster train speeds and in many cases lower rates as well. >> morgan, thank you very much. our next stop on the cnbc train, squawk alley. let's see what john has in store for us. >> good morning. we're going to continue to talk about this apple story. tim cook with a strongly worded

letter protecting encryption and apple's decision to go with that. what will the outcome be of this battle with the courts. also continue to watch these markets for nearer session highs on the dow and s&p and nasdaq. what's behind that? also virtual reality coming to the star wars universe. a strategic executive is going to join us to talk about what's coming along those lines. all that and more coming up on squawk alley. born with a hunger to fly and a passion to build something better. and what an amazing time it's been, decade after decade of innovation, inspiration and wonder. so, we say thank you america for a century of trust, for the privilege of flying higher and higher, together. ♪ all across the state the economy is growing,arts today. with creative new business incentives,

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good wednesday morning it is 11:00 a.m. on wednesday. john steinburg joins us today. former ceo at the daily mail. big story developing as we watch another big gain for the markets. that is apple. the ceo pledging to fight the federal government over an order to hack an iphone belonging to one of the shooters from the terrorist attacks in san bernardino. >> hi carl you remember the terrifying scenes in san bernardino in december when the two attackers killed 14 people and wounded others. the fbi has been investigating this situation ever since and they have been able to obtain the cell phone belonging to