2016. "squawk box" begins right now. ♪ >> announcer: live from new york where business never sleeps, this is "squawk box." good morning. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernin and andrew ross sorkin. we're going to start with the markets. take a look at the u.s. equity futures. if you'ring just waking up, is this something to behold. looks like the dow futures are up 180. they've been up as much as 200 points earlier this morning. this is coming after a week of gains across the board. you can see the s&p up by 21 point. nasdaq up by 51. overseas in asia, chinese stocks closing higher after beijing replaced the country's top securities regulator. this is why the viewer doesn't attempt to restore consumer confidence. nikkei up 0.9%. lots of debate, david

cameron has a referendum on eu membership set for june 23rd. ahead of that, a london mayor boris johnson will campaign to lead the eu. making him the most high profile supporter of the brexit. almost half back cameron's stay campaign. they're signing a letter backing him. the british pound falling sharply against the dollar. the biggest decline since 2010 and european equities at this hour, you're seeing green arrows across the board as the dax will open up, has been open, 1.4175%. cac up and ftse 100 up. oil also getting a boost this morning. we should till, you can take a look at the price of crude on the screen. wti crude trading at 30-61. sticking with energy prices at the pump, they keep falling. the latest lundberg survey

showing the average price of gasoline dropped 5 cents. to $1.77 say gallon. that's 56 cents lower than a years ago. but the survey said the demand for gas is rising which could lead to higher prices. >> did you believe what margaret thatcher said about the eu? and the journal always thought it was in the best interest of them to stay. interesting editorial today, the case for eu membership isn't as clear as it once went. the american interest is whether britain contributes more to global freedom and to our own economic strengths from inside or outside. we thought answer was inside but 2345u clear as it used to be." >> he's been mentioned as a replacement for david cameron. >> well, if he doesn't get his way on this, he can't stay, right? >> i don't think so. probably not. he's betting everything on this.

the thing that's going to be interesting this vote is not until june that's when you see probably the pickup in refugees coming down again. the winter tamped that down a bit. >> unelected bureaucrats calling the shots in belgium with margaret thatcher. and an even larger bureaucracy in decision making. and single currency, single financials. all of these things we've talked about again and again. we have nothing going on here. hillary clinton and donald trump has now won two of the first three race this is their respective primaries and caucuses. clinton claimed victory over bernie sanders in nevada. following her -- >> oh, just everywhere. everywhere i hear. one competing network. >> nevada -- >> someone corrected someone for saying nevada and then calling

them gringo. it was all over twitter. a lot of people saying nevada. >> figure out how to stay it. >> you're not going to get any votes from people who live there. you know, tried in illinois. if you say illinois you're not going to do as well. or in oregon. anyway, hillary clinton had a 22-point loss in new hampshire but you we don't know how that works really. right next to vermont. donald trump celebrated a clear victory in south carolina. and senators marco rubio and ted cruz will separated by just a couple -- less than 100, i think. basically, got about 22%. after a fourth-place finish, jeb bush suspended his campaign. he looks better without the glasses. he put on a few pounds too. remember how skinny he was skinny with the glasses. much more on the race for the

white house, question will have at the bottom of the hour. let's run through the markets one more time this morning. just in case you missed it. looks like the futures are up pretty sharply on this monday morning. this comes after a strong week. last week, the dow was up by 2.6%. the s&p futures up by 22. take a look at oil prices. this should be an interesting one to watch today. we do have the expiration of the march contract coming later today. right now the march contract is up by 3.4%. that's a gain of over a dollar to $30.60. again, we're watching this contract expiration today. you could see a pullback when april rolls in. the ten-year note yields 1.78%. if you're watching the currency market, you'll siee that the dollar is up across the board. sharply up against the pound.

that's the big move that andrew was talking about. the dollar/yen 113.18. gold prices down $25. $1,205.40 an ounce. let's talk about the story that we continue to talk about, apple resisting the order to unlocks the iphone. >> that's right, the war of words between apple and fbi continued over the weekend. former fbi director james comey posted a blog last night. in it he said a couple of important things about what the fbi's position sheer. he first said, we don't want to break anyone's encryption or set a master key loose on the land. i hope thoughtful people will take the time to understand that. he also said we can't look survivors or ourselves in the mirror if we don't follow our

lead. comey continues here very aggressively to push his case that the fbi needs access to this one particular iphone. this is not a threat to encryption. reuters is also reporting that some victims of the san bernardino attacks are going to file a legal brief at some point soon here on the side of the u.s. government. that would provide an additional purchased in the pr war for apple going forward. guys, a whole lot going on. as of friday we know that the house commercial committee has invited both comey and tim cook of apple to testify on capitol hill as soon as possible. we'll wait to see whether or not they accept that invitation. congressional hearings are certainly a possibility. >> thank you, eamon, a lot more developing. david franklyn, a former federal prosecutor is now a partner at shellman-rodgers. good morning to you.

you have a novel idea to get this resolved? >> i don't have a novel idea, but i do think this is going to resolve through a negotiated settlement. fundamentally, i don't see how apple can see this through the courts and potentially make bad law. as eamon just indicated and as the fbi director said this is entirely about one cell phone. and i think it's important to believe what the justice department has filed in its motion with the court which is it's very limited. apple is able to maintain complete control over the software, the technology. and everything really that can be done on apple's premises. so, almost to my surprise, based on everything that, you know, we're hearing about this issue, is that the way the justice department has approached this is very, very narrowly with a lot of deference to apple. and the judge has basically said in the cord -- >> jacob, here's the issue.

there's two issues. one is, we've had people on this set say that the second one of -- the piece of software like this is even created, the possibility that the chinese will have it, as one of our guests said, in 48 hours, becomes a possibility. and, two, the question and it's what tim cook has said repeatedly, i'm now playing devil's advocatadvocate, i'm in position saying this to you. that the precedent this creates even though it's this is narrow, every municipality in the country that has cell phones lying around is going to call apple and say open it up. >> did you just call tim cook the devil? >> the devil's advocate. to take this side. >> devil's advocate, that's the legal terminology? >> who's in the position here?

>> tim cook. >> andrew, going to your question, this reminds me that there is a search warranted for this telephone. so there's actually been a probable cause determination. so that's why you have to go back to the motion itself which really sets forth the detailed steps that the department of justice has taken to preserve -- you know, to preserve and protect general -- you know general public privacy. yes, that's a concern. >> i mean, this apple's worst nightmare. you are talking about a terrorist attack. this is the most difficult case that apple could try and take on. i understand tim cook's case where you don't want to set praes precedent. >> how you can force apple to

write new code? >> i mean -- >> usually, the federal government cannot tell a corporation what to do. >> sure. but there's more obligation in this instance. >> what we're talking about is that frequent debate between legal obligation and public policy. public policy informs the courts as well. that can be where you started, where there was a public policy where the justice department has drawn that as narrowly as it has done it. here the courts are not saying to create software to unlock the world. what they're basically saying using their authority on a very old law that simply says you have an obligation to help the government. >> jacob, here's the question that becomes sort of the central piece to this. to the extent you believe a

settlement is possible, i understand how the government can get to a settlement. i have a harder time seeing given the line in the sand that apple has brawn how they get to a settlement? >> that's why in some respects this is really a public relations debacle for apple. but i also think the potential for bad case law that will affect apple more broadly and the industry more broadly openly is of greater concern. i think the face-saving step that apple ultimately is going to take when there is a settlement because i really do not believe this is going to wind its way through the courts. let alone forget about the supreme court or even to the 9th circuit. i'm not sure this will be a judicial decision even close to march 22nd. we will see a brief tomorrow. apple is going to file a brief and we'll have a lot more vetting of these issues.

fundamentally, they're going to say, yes, we have a way to protect. interest of the public and still satisfy the needs. because we also, the justice department was very clear in its motion, apple has been complying with these requests all along, just a different version of its software. it's not like this is unprecedented. it's now that apple is beginning to take up this fight. and i think part of what's really going on here is it's the justice department that in some respects started this by filing this publicly under seal. so, i think it's really a -- significant public relations component to this. and for those of us who practice in this area, one of the things that we always want to do for our corporate clients is keep these kinds of issues off of the central stage. instead, here it is. i think really it does not serve apple well. >> all right, jacob, we will see where this all goes. we appreciate the time this morning. >> thank you. >> great to see you.

>> apple is using it for public relations in his favor with his peers. >> the chinese. >> i'm not sure the public relations with -- i don't know who is winning right now. let's get back to the markets u.s. equity futures indicating triple-digit gains for the dow. joining us now is kim bush, he's head of macro and economic policy at merrill lynch. and seth masters chief investment officer at a.b. bernstein. who wants to start. is that cool to say you're back with risk-on? we never used that 20, 30 years ago? is that what people are saying a risk-on? >> yeah. it's cool. but it's okay to say. it's back on. risk-on again. >> why? >> i think markets are feeling supported by the fact that there's a meeting in china, you've got finance ministers and

heads of state are going to be meeting to talk about how to keep markets fusioning and stable. i think that reassures markets. >> china is back up today, too. up 2900. >> it's going to stay quiet because you eyes are on china. i think the other sense, the fed and central banks are committed to keeping things in easy mode for the time being. >> commodities, they can't get any worse, either. right now, they're not even shipping stuff. does the baltic index mean anything? >> well, the baltic index means something, what it's telling you is about commodities and manufacturing and a lot less than services. service, probably the main focus here and abroad. you might want to look at baltic but also think about services. >> i think the key part, risk on, risk off, is a cycle that

we've seen play back and forth and we'll continue to see for a while. a lot of the structural issues that case risk-on, risk-off, are going to be out there for a while. what you're seeing the market kind of a schizophrenic tendency to see the glass half full. rather than half empty. >> if you were the fed in june wow, go ahead with three or four more? >> i'd do what they're doing, probably give themselves more flexibility because nobody can predict what's going to happen. >> is it a world where we couldn't stand a court-appointed increase at 4.3% unemployment? >> remember, there's in fact more tightening than meets the eyes, it's a function of a lot more than exchange rates fun look at the total picture -- >> it's a different world than

we're used to? >> exactly. >> and someone said we're going to need a pause. a more extended pause in this cycle because we've gone up a appointment. it's tight, it's tight because of the dollar. >> well, the market is also pricing in a lot of bad news. especially in high yield, you're seeing people assume around the corner there's very little evidence that suggests that that is even possible. >> people don't see that if there's more evidence that it's impossible? >> high units of retailers. they're a very tiny part of the overall economy. if you look at the economy, i think we're growing at a modest pace. wages are actually growing. unemployment is low. it's not unhealthy.

it's just moderatmoderate. it's not exciting. i think people are very pessimistic about that given what the facts are. that mean there are some opportunities. the problem is though, what you can't do is just assume that the market as a whole is going to power you forward. because we don't think there's going to be very good earnings growth overall. you'll see low returns in the market with a lot of volatility. i think that's why people are nervous. that's what you need to be doing now, rather than buying broad market exposure like ets. you focus on opportunities where babies are being thrown out with the bath waters. >> i think the markets tell one story and macro is telling another. you got to separate the two. you got to look at the data and as also that the reflection in the markets. we are growing one of the faster growers as it is in advanced economies. >> about 2%. >> 2%, and we should like it.

>> you were in -- >> it's like $1.75. >> yeah, i saw it. i had looked. i thought i was seeing something wrong. >> it's the lowest in over seven years. as we get back to the great recession. >> do you remember, it came down to $3. we thought, oh, thank god it's back to $3. and then someone pumped for me, too. anybody that doesn't live in new jersey -- >> i go to the full service side. >> even in -- do they have that anymore? >> they do. >> well in new jersey, they got to do it. that's the best thing about that state. >> it's a telling point, given psychology today, people are worried about the fact that oil and gas prices are low. that is in fact for most of the economy, a boon, but it's become a talking point for the naysayers. >> it's because people don't believe it's just supply. they think it's something we

don't understand about demand. something ahead and wicked. >> it's a lot of uncertainty. it's just pervasive, it's making us not unjoy what's ahead. with the economy and macros. but we are doing fine. >> it's key to note when oil prices will move back up. we think they will but who knows when. the key challenge is you can take advantage of the fact that some people benefit a lot from low oil prices. >> so the market is responsing today to "a," the big donald trump win. "b," hillary thwarting bernie sanders vote, and "c," the london mayor. >> or "d," china opening and going smoothly. >> or e, or all of the above. >> i'm voting on "d," china smooth and steady for the week.

>> i'm just wondering with the political stuff when people start looking at it. i thought maybe a brexit would be scary. the markets are so up on a grexit. who cared about a grexit. >> the grexit was they were headed into bankruptcy, that was the problem. if britain decides not to do it -- >> right, if britain decides not to do it, the whole thing is thrown into chaos. 40%, and now got boris who people love. >> i'd be worried still. >> you don't think they're going to do it? >> i don't know, i don't think the markets get crazy until a month out. >> when do they vote? >> june. june 23rd. we're in february. >> and then when do we vote? >> we vote in november. bernie/donald. >> maybe the mayor jumping in, we'll see. >> you hope. >> the upper west side hopes.

anyway, thank you. when we come back, saturday's fourth place finish in south carolina marking the end of the campaign trail for jeb bush. we will tell you what's next on the docket for the candidates straight ahead. first, a programming note, we'll be sitting down with warren buffett on leaf day. monday february 29th. we want your help. go ahead and send your questions tour the oracle on facebook and twitter. use the #askwarren. give us a question that might just make the show. stick around, "squawk box" will be right back.

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john harwood joins us with more. i wonder about carson and kasich. i wonder what's necessary to get this with which way it goes. i don't know. what's in it, do they like signing bookings and the attention that they get? >> well, i think there's a difference between those two. let me first run through the basics of the results, joe. on the democratic side, we had caucuses in nevada, which hillary clinton won by 52-47 over bernie sanders and really withstood his momentum. that was an important shot in the arm for her, as we move to super tuesday across the south. you got march 1st, the democratic primary in south carolina. now the republicans had their primary in south carolina over the weekend, and that was the one that produced the shakeout

you're just talking about. donald trump winning a double digit margin in that contest which is an impressive win for him across the state. won every congressional district. won all of the delegates coming out of south carolina. then you had the bunch behind him, marco rubio in second place who by about 1,000 votes edged up ted cruz of texas. they're trying to cast it as a three-man race. jeb bush led the lower tier, just barely ahead of john kasich and ben carson. jeb bush, of course, dropped out of the race. it was not viable for him that was the place he hoped to make a comeback. but john kasich is staying in, because he thinks when we go to the midwest, michigan on the march 8th, ohio on march 14th, he can accumulate enough votes. ben carson said he's not going anywhere. we're achieving the shakeout on the republican side. the ultimate question is going to be can anybody unite the

broad swath of the country to defeat donald trump. joe, on the evidence right now, you have to say that is not likely to ham. >> which is pretty amazing. i wonder if cruz were to get out, you can't just add his numbers to rubio either? >> that's what i mean, you got to take -- >> definitely not. >> you probably have to add them to trump if cruz gets out of it. >> or carson. >> well, in reality, votes scatter, but you cannot assume that the bulk of cruz voters are going to go to rubio. now, we do all of these polling of people, second choices, and that produces some indication. nbc/"wall street journal" poll, when we said in a one-on-one matchup between donald trump and marco rubio or donald trump and ted cruz, donald trump loses both of those by double digit margins. the question is when do you get to that matchup. >> when will jeb bush endorse

rubio? >> don't know. don't know. whether he's going to endorse somebody -- >> that's the only thing he can do at this point. >> he could endorse john kasich, depends how strongly he feels about marco rubio and the bit r bitterne bitterness. >> all of bush's people are go together rubio. >> no, i was going to say there's a lot of big money on kasi kasich. >> another one -- i think your friend. >> which one. >> zuckenberg -- >> yeah going to have to go somewhere else. >> john, joe's counting him out, i just wonder because i think we're going to hear about it one way or another, mayor bloomberg -- >> what sorry, what was the question, andrew? >> it's not a question. it's a wish. >> i do not expect -- >> it's a fervent hope.

it's a please, mr. mayor do this. no, go ahead. >> what, andrew is begging him, is that it? >> bill ackman begged him last week. i'm just asking the question. >> my belief is if hillary clinton is the nominee, bloomberg will see there's not a sufficient market for him and will not jump in. if bernie sanders somehow restarts the enjoy and retakes hillary clinton -- >> it's my fervent -- i actually want him to jump in more than you do. >> by the way, the argue in "morning money" is about that very issue n. that he might ultimately be -- >> we'll all be thin, there won't be any guns and the climate will be healed. >> hey, john, you know, i

thought duke, you know, you had one point where you looked -- you know, it was okay, and then louisville came in and just smoked you again. you're just no good this year, i'm sorry. >> you know that was a tough game. i'm proud of my team. they hung in. they had almost nobody. they had an injury during the game. they had guys foul out. and they just didn't quite have enough -- rick pitino is a good coach. he's got a good team. i think when we get myke jones back -- >> i was trying to elude to the teams. xavier is one? >> xavier is one. the other one, villanova. >> when do they play? >> wednesday. >> where's the game? >> that's a good question. i think the first one was in

villanova, i think, because they got beat. the first game, the on loss at home for xavier was georgetown. they beat georgetown badly in d.c. over the weekend. by 18 points. >> this is a rare matchup of teams beginning with "v" and "x." it does not happen very much. >> you're taking xavier? >> yes, they're the underdog. i'm for them. >> they got beaten badly. this guy sumner is coming on, this freshman. he's unbelievable. . he got a concussion. anyway, john, thank you, with your analysis. you know, march is coming up and you know what comes with march? >> yeah, my beating new the march madness? >> you try that again -- you try that again -- i'm ready this year. >> i know so much about it. >> the more you know the worse time you have in this.

>> i've seen all of the teams play. i'm going to be able to pick all of the winners. joining us now with their analysis for race for president, margie o'meara, she's host of the podcast the pollsters. her husband is part of the bernie sanders media team. and we're also joined by rich gala, he's a republican strategist. let's start out with what we were discussing with john. we know there are a lot of people who have dropped out of this race. still, nobody in this can come close to beating trump? >> i thought you wanted to talk about men's basketball, marietta college basketball. 22-2, ranked number four in the nation as we go into the ohio conference. >> nice. >> what division? >> no, high atop d-iii, pal. >> i don't see them anywhere on

here. i'm just looking at the rankings. the. >> the answer to your question, becky, at this moment, i don't think anybody will and can stop donald trump. it's not just that he's doing well, he's doing well in every possible plane in the polling. he's winning in geography, you know, other than college-educated moderates. >> well, he's got something like 61 votes already from the electoral college. the closest at second is cruz with 11. >> well, delegates. >> in the delegate count, correct. >> that's correct. that's where thing thing gets won and lost. but i think on our side, on the republican side, that, remember, in 2008, senator obama, then senator obama, only won iowa with 36.5% of the vote. hillary clinton and john edwards split the other 60s.

so people that say trump's only getting 28%, 30%, 35%, that's all you need. >> you don't see this playing out any other way. is there a way to change this down the road or do you think this is almost a done race? >> well, it's hard to say that it's a done race. part of it is the expectation game. if we were talking about companies, as you guys are during times. if i do $1.20 if the street is expects $1.80, i'm a huge success. i think it throws things back into a mix again. john kasich has got two directions to go, i think on that stop. one is that he wants to get enough votes to be the balance of power as the republicans go into their convention in

cleveland. or, "b," the least win ohio, no matter who the nominee is, kasich is at the top of the v.p. list. >> let me just back that up. one is to try to be at the top of the v.p. list. the other is to be the balance of power. are you suggesting a brokered convention where he walks out as the winner? >> no, no. but i mean, hillary clinton went into that convention in 2008 and came out secretary of state. so there are deals that can be made without being brokered. we're using brokered and contested as the same word which is okay. but, no, i think there's a lot of opportunities for somebody, if he gets enough delegates to hold the balance of power. >> margie, let's talk about the democrat side. the lead story in "the new york times" points out when it comes to delegates hillary clinton has 502, bernie sanders, 70. they're saying that is basically locking up the race at this point. do you agree?

>> well, i think there are a couple different tracks. the first is what's happening when you look at the outcome of the road. clearly, clint hadn't a strong showing in nevada and is expected to do well in south carolina. and couple weeks after that, you go to super tuesday where both candidates span out. i think there are challenges for sanders. it doesn't mean that he's going away. he certainly has a strong base, thank you strong enthusiasm on his side that they can kept that contest for a couple weeks or month. the i think the other track is the super delegate piece. those folks are right now lining up for clinton. it doesn't mean they can't change. it will depend what goes on in the votes and the rest of the contest. certainly, whichever track you look at, currently, clinton has a clear advantage headed into south carolina on a super tuesday. >> margimargie, let's talk abou balance of power that rich was

describing with what kasich may be trying to do. how does bernie sanders affect this race? how does he affect hillary clinton the candidate? >> i think you already see that. i think on the democratic side. while it's contested. while you have a lot of folks on either side. i think ultimately, you have a lot of democratic voters very happy about the field and happy about conversations they've being had. whether talking about equal pay or gender quality or race. all of those conversations are conversations that we think are important as democrats overall. by contrast with the republican side where even republicans are looking with trump's success with some dismay, trying to figure out how to stop him and seemingly unable to. we don't have that same dynamic on the left. we think whatever the outcome, voters are very pleased that these conversations are part of the national data. >> are you worried about bloomberg throwing his hat in

the ring? >> i think there are a lost things that need to happen before that becomes an actuality, as opposed to another point. >> any discussion? >> one thing we know about 2016, the more predictable thing is that it's become unpredictable. margie, rich, thank you both. >> rich, it's division ii. >> that's the one. i went to school there division iii. >> i didn't know. i was trying to figure out you what meant. it's division iii. which doesn't mean that you're small, it just means you don't offer scholarships or you're small. >> both of those are true. >> i'm going to look at division ii, i'm going to be an expert on all of them. i, ii and iii.

the pioneers. >> thank you. anyway, coming up, visa wants to turn your car into a payment system. details next as we head to break, here's a quick check of what's happening on the european markets right now. up pretty strongly across the board. germany up almost 2%. oh remotes, you've had it tough.

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welcome back to "squawk box" this morning. it's time for "executive edge. "visa wants to turn your car into the next payment platform. the company showed off a concept app in the mobile world conference in barcelona. it creates the app to tell

drivers when the gas is low and navigates them to the nearest pump. >> my car already tell please that. it's got that ding, ding, ding with the dummy light. >> you mean that you're out of gas. >> this will tell you. >> and there's a card, a place you can get gas with an app, right? >> you see it, it goes on with a couple of gallons and gets you there with the red light. >> i've had it come on. >> a how about a car that just drives to the gas station? >> without any choice in the matter? >> yeah, we're going to the gas station. actually in the future, you won't go to the gas station. you'll be charged up. >> or the wind blowing, too. >> yeah. >> you'll not even plug in, you'll just drive into your garage it will wirelessly --

>> but to get electricity, you got to burn coal. >> i know, it's all downstream. relax. >> yeah. >> you want to read them? >> i thought we had another story we were going to talk about? >> no. >> that's not happening. >> coming back, samsung unveiling the latest galaxy smartphones at the mobile conference in barcelona. we'll get to jon fortt there on the ground. we'll talk about the debuts at the largest tech gatherings in a moment. you're an at&t small business expert? sure am. my staff could use your help staying in touch with customers. at&t can help you stay connected. am i seeing double? no ma'am. our at&t 'buy one get one free' makes it easier for your staff to send appointment reminders to your customers... ...and share promotions on social media? you know it! now i'm seeing dollar signs. you should probably get your eyes checked. good one babe. optometry humor.

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they speak louder. we like that. not just because we're doers. because we're changing. big things. small things. spur of the moment things. changes you'll notice. wherever you are in the world. sheraton.

good morning. >> this is also samsung's biggest stage. they unveiled their premium, high-end flagships phones here. that's what we got with the galaxy s-7 last night. a special guest. mark zuckerberg showed up and stole the show. he was talking about samsung's products. along with the s-7 comes virtual

reality possibilities. samsung rolled out the gear 360 also. it's a camera on both sides, takes an immersive picture for virtual reality. facebook of course supports this as well right now. and so he was talking up virtually the partnership that samsung has. i talked to erikson's ceo about it earlier today. he said he has not been asked to do the sort of thing apple has been asked to do but security is very important. >> for us it's important for a robust technology. we are in 180 countries. few others are in 180 countries who can talk to everyone, what is reason, how do we work with privacy and security and resiliency of data. all of that. >> so the conversation continues

here about that. we're going to talk to at&t's top guy in mobility and business. and also intel's ceo coming up pretty soon. intel has its own security business, formerly known as mcafee and now intel security. they do a lot of business with apple supplying the chips for the macs. i'm sure he'll have plenty of perspective to share on that. guys, back to you. >> thank you, john. when we come back, u.s. stocks coming off the best trading week of the year. we'll talk to strategists next. later, house majority leader kevin mccarthy appears to talk politics and the race for the white house. "squawk box" will be right back. dow up by more than 180 points this morning. "scorsese finally wins."

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a commodity rebound boosting global markets. meanwhile, the brexit debate heating up as the mayor of london backs an exit. the latest from europe and what will move market this monday straight ahead. the fbi fires back at pappl. a security expert joins us. he has a possible solution. history in the making at the daytona 500. nascar kicks off its 2016 racing season with a nail-biter. >> i have chills up my spine. >> the second hour of "squawk box" begins right now.

live from the beating heart of business, new york city, this is "squawk box." welcome back to "squawk box." i'm joe kernen along with rebecca quick and andrew ross sorkin. about a 3% week last week as far as gains, by far the best since the new year, which i final wrote -- i don't write many checks. but i finally got it. it's 2016. >> yay! [ applause ] >> i will write a check on february 29th. >> for leap day! >> you missed the pibirthday bo >> i sent him a note. i saw it on twitter. >> he is a fish.

a piesies. >> did you have a good birthday? >> i did. >> did you go to dinner? >> we went to dinner and we all went skiing. >> in new jersey, right? >> thunder ridge. >> it was so sunny. it was 50 degrees outside. >> we made a big dinner. >> go back to oil. >> happy birthday. 39. >> thank you. we get to continue the birthday. my kids get a whole week. oil is up. you say it's going to roll. >> roll today. >> couple of dollars higher. >> you wonder if it comes back under pressure. >> it's up $1.17, almost 4%. surging to $30. gas $1.75 a gallon in a lot of places. >> as joe mentioned, gasoline prices at their lowest in more

than seven years. the latest survey showing the average price at $1.77 per gallon. down 5 cents from over the past two weeks. u.s. oil output may fall in the short term but resume growth. it's predicted to reach an all-time high by 2021. bank of america rolled out a new mortgage product today allowing down payments as little as 3%. the new offerings avoid involvement with the federal housing administration, side-stepping a requirement for private mortgage insurance. >> doesn't take much to be under water on that, does it? >> no. about a day depending on what's going on in the housing market. >> is this a good thing or a bad thing? you're hoping it's a good thing. >> we're offering credit. >> you're happy because of tft 2.

"too big to fail 2". lots of debate about a possible brexit this morning. david cameron has a referendum set for eu membership. ahead of that the london mayor says he'll campaign for britain to leave the european union making him the most high-profile supporter of the british exit. i think more than half of fortune 100, i understand that. i am not sure that's a selling point when big business and crony capitalism necessarily gets on one side or the other. you expect -- i know you, you expect the uk to stay eventually, right? >> i think most would say that's the most likely. the book makers say that. even though the pound is falling sharply today, in fact the latest polls have the in camp in a more significant lead at the moment, but if the scottish

whoas is a go-by we can expect the volatility to remain. sterling having its worst day in over a year against the u.s. dollar. it's accelerated losses in the last hour as u.s. investments are going up. down over 2% a significant fall. last may it was 158. it's a significant fall. partly because of brexit. the difference in the performance in the ftse 100 to sterling, the ftse is up today. able to shrug off the move in sterling. worth also pointing out, this is not just a uk issue. lots of talk over the last 24 hours and over the weekend has been focusing on what this means for sterling and britain. but what does it mean for europe as well if we were to get a brexit or we got closer to the

likelihood. europe already weak, could a brexit spark wider mayhem for europe. that would have a big impact on global trade and economics. right now the focus is on the pound, down over 2%. lots still to come out, of course, between now and june 23rd. the biggest development over the weekend, not specifically the terms of the deal that cameron secured but the fact that we have got the referendum confirmed for june 23rd. >> where were you? were you on vacation last week? >> i was on vacation. i was not in london but i was following the news regardless. >> you don't go home for vacation. have you -- you need to travel around here. if you're going to be an american, you need to -- you been to branson yet? >> no, joe. >> the ozarks? >> i've been in my life to l.a. three times, vegas three times and new york lots. all of the rest of america i still have to travel and explore.

i cannot wait to make the most of it. with these early hours on friday hopefully i can pop off early. can you send me a list of recommendations? >> i can. will you take andrew with you? >> i'd love to. >> the middle of the so-called flyover states. i like your style, though. l.a. and vegas. that shows where your mind is. >> vegas i want to get back as soon as possible. sfl >> i bet you do. >> i was in the london underground this weekend, in the tube. there was an ad there. it said this year for vacation go somewhere where your accent is an after trphrodisiaaphrodis. is that why you love vegas? >> i just think it's a unique place. i want to get back there. >> your accent is an aphrodisiac right here on cnbc.

>> maybe i'll take you on holiday. >> yeah! all right. thank you. >> guys, thanks very much. >> i'm not joking. that was the ad. >> i believe you. >> i thought it was an effective ad. >> you can be an actor. you don't even have to be good. it's like, he must be a shakespearean actor. >> they know we're suckers for the accent. >> it's the accent. >> it works. the markets resumed trading today after coming off their best week of the year so far. joining is gab rella santos. global marks strategist at jpmorgan and global market strategist at td ameritrade. is it oil prices? is it china opening and not having concerns? what do you think is at play here? >> i think it's a combination of things. last week we got very positive u.s. data.

i think it's some of that easing of the recession fears that's come to the forefront this year. we got good retail sales, industrial production. inflation firming up again. i think part of it is fundamental and part we were oversold and sentiment was very negative. >> we're still down exactly 10% for the s&p year to date but we're looking at putting together strong trading sessions. has momentum turned here? >> i think momentum has. if you look at how the year started out. we started with basically a punch in the face a few days in a row. so i think people didn't really engage quite as much. and so, if you look at the selloff was very orderly, opposite of what we are used to seeing. now that we're coming back it's like the market has gone in reverse. usually the up moves are orderly and the down moves are very quick. what we've seen over the last week is that the up moves have happened very fast and down

moves have been the most orderly moves i can remember for a move of that big of a move overall. i think what's kind of happened is people who were sort of waiting have come back into the market. >> i heard people start to ask last week if it was just as risky to be short as it was to be long. >> i think a lot of fund managers particularly, one putting all their capital to work and all of a sudden they're like, i can't miss this move even if we go back to zero, it will be a nice return on the money i had sitting on the sidelines. >> aside from a few good economic numbers, we haven't really seen a huge change in any of the concerns out there before. still a huge oversupply of oil. still a lot of concerns about china's economy and other economies around the globe. >> that's why we think we need more patience over the next few months. we don't think we'll ease any of these fears or uncertainties in the short-term. no magic bullet for the market. i think it will take some time as the data comes in positive,

as we get what we expect a positive earnings season in the first quarter. those are kind of the long-term fundamental stories that will help us edge higher. >> i saw something over the weekend suggesting that jpmorgan is still looking at a 31% chance of a recession in the united states. that's basically still a one in three chance. >> that's not very high for any given next 12 months, within the 20%, 30% range is still decent. i think the market, if you look at spreads, if you look at the correction we had, the market was assigning a much, much higher chance of a recession. much closer to 50%, 60%. if we're saying 20%, 30%, we're not there yet. there was mispricing there. >> we're watching oil prices up significantly 3.5%. what do you think is likely to happen? it's led to a lot of volatility the last couple of months. >> the volatile moves we have won't disappear. if you look at the options markets it would say we have a 40% chance of being back to

$18.75 in just two months. overall, when you look at volatility, that happens quickly. you get this quick relief. it's not completely out of the system. wouldn't surprise me to continue to see us bounce around. the correlation between crude oil and s&p 500 futures is back down to 77% level. so many of these moves happened overnight so it's a little higher for futures than the spx. we're down to 77%. the point has been in 2016, no matter who you are, you have been trading crude oil synthetically whether you thought you were or not because it led the market. >> do either of you care about a possible brexit? does it weigh on you at all? >> i think it will affect the currency markets, obviously, quite a bit which may affect rates. i don't know that that's something that will necessarily take the market off track except for the fact that, if you combine it with some of the other news that we have had of

crude starting to sell off, et cetera, but that in and of itself i don't think is a major father. >> thank you both for coming on. coming up when we return fbi director james comey firing back at apple over the weekend, the government trying to downplay the dispute saying a precedent would not be set if the apple helped to open the iphone of one of the san bernardino shooters. the bid for the republican nomination getting tighter after marco rubio's surprising razor-thin finish for second place in south carolina and jeb bush shutting down his campaign. we'll talk presidential politics in a bit as well. "squawk" returns in a moment. flrb flrb r oh remotes, you've had it tough.

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record this. voila. remotes, come out from the cushions, you are back. the x1 voice remote is here. . welcome back much. the dispute between apple and the fbi is escalating. the fbi wants apple to create software to unlock the iphone which it would then allow apple to destroy. james comey -- in an email to employees tim cook said in the wrong hands the software would have the potential to unlock any iphone in someone's physical possession. our next guest is offering an alternative solution to the dilemma. chief privacy officer at fire

eye. what's the solution, shane? >> i think the solution is more partnerships and discussions. there are other ways to obtain the data they're looking for. the advanced forensic techniques that they can use. >> that the fbi can use? >> correct. my point is that they shouldn't be relying on a private company to go in and hack its own system. apple has spent millions, probably billions of dollars, making the iphone more secure over the years. and they're being ordered here by a court -- this is unprecedented -- ordered by a court to go and create a new version of their operating system solely for purposes of removing the privacy and security safeguards. they've made it one of the secure mobile platforms in the world. general speaking courts issue search warrants and subpoenas for companies to turn over information and things. here they've commandeered the apple development staff asking them to create a whole new

version so that the department of justice, the d.o.j., can hack the iphone of the san bernardino shooters. >> i'm confused. you're saying it's all hackable and the government still can and should hack it? >> not in this particular case. in other cases. i think that probably human intelligence, advanced forensic techniques on the front end so that they can find these terrorists before these events actually occur. there needs to be more investment on that. >> why do you think technology companies should be immune to warrants and subpoenas like the rest of the analog world? >> i do not at all. i think they should have to respond. this is not a warrant or subpoena. this is an unprecedented court order making them rewrite their operating system and remove the protections that they had in that operating system. this is absolutely unprecedented. >> in an instance in which these devices are being used for what could be described as terrorism, right, i mean, that's the

allegation here, is there no moral obligation for a company to try to help solve this particular crime? >> i think there is. yeah. >> in terms of the slippery slope, the argument becomes more complicated if you have an instance where something is happening in process, live, right? if i told you, for example, that we thought there was terrorism activity and that something terrible was going to happen to multiple people tomorrow, would your position change in terms of the requirement that a company like apple try to help the government solve that? >> i don't think it would change at all. my position is that absolutely the company should try to help. in fact here apple has tried to help. apple turned over the entire backup for the iphone that was on the cloud. they cooperated with the fbi and d.o.j. quite a bit. they have not rewritten their entire operating systemf for ths

one case. >> why is james comey wrong, then, when he says this is a narrow instance and that they would not be taking the software and putting it out into the l.a.n. >> i don't think the fbi would intentionally release the software that they're requiring apple to write here. you and i both know that these things get out. the software itself doesn't even have to get out. if the techniques and methods that apple uses to get rid of the privacy and security save guards, if those get out, again, the the damage that could occur to the privacy and security of hundreds of millions of people all over the world is immense. and apple itself would probably be subject to huge reputational and economic risks at that point. so i mean, i fully agree with apple and their stance. >> shane, how safe is it really if they can actually hack their own system? >> well, they -- it's very safe because they're not even sure

they can hack it yet. they would have to redesign the operating system. the court has ordered them to try to do this, to remove certain protections that prevent it from being hacked. apple are supposed to remove the protections, according to the court order and then turn that software over to the d.o.j. again, this is apple turning over this software to the d.o.j. where they don't know where the software will end up, if it's going to be used on other phones. they don't know whether the methods will be used to compromise the security of their users all over the world. >> is there a compromise that you could see? >> yeah. in this particular case or just in the broader sense? in this particular case i am not sure if there is or not. i don't think there is enough detail out there for me to answer that question. >> what about in the broader sense? >> in the broader sense i think generally speaking you have a lot of pos turitures by both si. the government has exercised their nuclear option, the 18th century statute they're trying

to use to make apple develop something for their use. in the silicon valley side, apple and others, could probably sit down and be a little bit more cooperative as well. i think, if you get the people around the table and talk about compromise, you can build programs and escalations such that the companies will help under certain circumstances. one point we're missing is that apple doesn't have a key to this phone. apple does not have the ability to unlock it for the government right now. all they can do is go through this immense development effort to remove all the protections that they've taken years to put in and to let the d.o.j. be more successful in their hacking efforts. i think there is compromise to be had. i think we need to reduce the pos turing and rhetoric and come up with a compromise solution. >> shane, appreciate it. thanks so much. coming up, it was the 58th running of the daytona 500 over the weekend. and it's never been this close before. highlights after the break. later, apple ceo tim cook,

talking about taking on the government saying the fbi's iphone request is chilling. is he really trying to protect iphone users or is he trying to protect the brand or both? we'll talk about his decision to test the high courts when we come back to "squawk box."

welcome back to "squawk box," everyone. the film dead pool dominated at the box office. the movie raked in $55 million in north america. that makes the r-rated film's domestic earnings total over $240 million. "kung fu panda 3" came in second place. in sports, the daytona 500 is where the rubber hits the road. the nascar season kicked off sunday with the 58th running of the great american race. it proved to be an exciting finish. we go to the final lap with the pack of cars bunched up heading for the checkered flag. denny hamlin and martin truex jr. were neck and neck as they crossed the line. hamlin won by mere inches. photo-finish. he edged out truex by .001 seconds. the 58th running was the closest

ever. >> it was even closer in cars. remember the original? >> mcqueen. he won in that one too. i remember. i did see that race. haven't seen a lot of these. but this one -- >> on nbc? >> yeah. >> looked amazing, though. >> yeah. >> what's that? >> coming up, donald trump wins south carolina. marco rubio makes a surprise jump in the polls. nascar is a great sport. great to watch. the bush campaign runs out of gas. we'll talk about the race for the white house next. as we head to break, u.s. equity futures up 174. on the dow. 20 on the s&p. oh remotes, you've had it tough.

watching tvs get sharper, bigger, smugger. and you? rubbery buttons. enter the x1 voice remote. now when someone says... show me funny movies. watch discovery. record this. voila. remotes, come out from the cushions, you are back. the x1 voice remote is here. welcome back, everybody. among the stories front and center. volkswagen may be making electric cars in the united

states as a way of making up for its diesel emissions scandal. according to a german newspapers the request came from the epa during talks with the auto maker over the diesel emissions issue. general motors may cancel its plans for an investment in brazil. the gm says he will reconsider in the economic and political situation in the country doesn't improve. we watch shares of yahoo!. the new york post says they've hired firms. it's not clear that the board is making a serious attempt to attract bidders. the stock is up 1.5%. prices at the pump keep falling, not surprisingly. the latest survey showing that the average price of gas fell 5 cents over the past two weeks. now $177 -- $1.77 a gallon.

56 cents lower than a year ago. analysts chock it up mainly to response to the weak oil prices. crude has stabilized recently. that could eventually lead to higher prices. i had 1100 horse power. there was nowhere to go [ honking horn ] >> you never like this. it caught you at an odd time. >> i knew there was a camera there. they're putting a horn in. >> you weren't really doing that? >> no. >> i like the one with andrew better. where is that one? >> we'll get to that one. >> in the meantime, bad news for you amazon users. i know you are a big amazon user. here it comes. amazon quietly raising its free shipping minimum to $49 from $35 for non-prime users. prime users, you're okay. others may not be.

the minimum for books still $25. the move likes like another push toward the $99 prime membership. amazon trying to push people into that. check out shares of amazon over the past year. you're looking at it now. up $543. donald trump scored a win in south carolina while jeb bush finished fourth and left the race. joining us now to talk about the next steps on the campaign trail, former south carolina governor jim hodges and former new hampshire governor and former u.s. senator jed greg. it's been an easy race so far to handicap, governor hodges. can you tell me how this will play out? everything has come true as we all predicted. can you believe this? on both sides. >> it's amazing. certainly an unconventional election. the passage of jeb bush from the race i think is something that's pretty shocking on the republican side. i think we saw pretty clearly

that trump was going to do really well in south carolina. that wasn't a big surprise here at the end. but on the democratic side i think hillary clinton's success in nevada should lead to a real nice, solid win here as she comes to south carolina. march should be very good to her. i think she'll have a strong march period and she will continue to dominate on the democratic side. >> jed, good to see you. haven't seen you in a while. ted cruz should have won all the evangelicals in south carolina, shouldn't he? >> well, that's conventional wisdom but i think it's pretty clear that donald trump cuts across the large swath of folks who basically consider themselves disenfranchised, whether evangelicals or just folks working for a living. that's the folks he's drawn to his camp. >> you're comfortable being elected to governor and senator from a state that backed bernie sanders? can you explain that to me.

you have the crummy maple syrup. >> i like it. it's very good. >> okay. you're off the list. it's startling to me. listen, one thing the 20th century showed us was that socialism doesn't work. millions of people died in the soviet union, the nazis were socialists. the economies have that been destroyed and lives destroyed. most recently greece and argenti argentina. it's clear that socialism is a failed policy of the past. i think high schools have failed to teach history and the simple fact is -- >> and economics. >> and economics. but i mean, market economies raised more people's standard of living than socialism wherever they've been in competition. the fact that this is not being communicated effectively in the democratic party is startling. you see hillary moving almost to mimic bernie on his positions which are so far left and so out

of the mainstream of what history has showed us works that it's hard to understand. why did new hampshire vote that way? i don't know, to tell you the truth. >> maybe he likes those -- those cars, those cars from the '40s and '50s in cuba. maybe he is an aficionado of the old cars. that's what the cubans who didn't leave cuba are driving. the ones who got to miami are driving ferraris and are millionaires. people are living on $20 a month there. that's your party. you're from south carolina. i'm not going to blame you. can you explain it how the democratic party allows for someone like bernie sanders to win new hampshire and come close in nevada? >> well, the republican party a has its own problems to worry about. >> i know, but just -- >> it's important to make that point. i think -- >> so you don't like -- a

successful businessman who has created thousands of jobs. we're talking about socialism. i'll take trump any day over bernie sanders. >> look, reality will set in in south carolina and beyond. i think you'll find that much more moderate voters in south carolina, large african-american population, which benefits hillary clinton. older voters here. i think you'll begin to see in month of march that you'll find that the pace of the election is going to benefit her much more and the sanders bubble will burst. >> it's just amazing, though. >> judd, would you back trump if he is the nominee? >> well, i guess i would. it would be a tough call, though. this has become a "duck dynasty" campaign where substance and rational thought has been pushed off the table to be replaced by one-liners and superficial ideas. our country has very complex issues facing us, whether they're international policy or fiscal policy.

you can't answer it in a one-liner that just basically blames somebody else. i am an inclusive guy. i don't happen to think our party should be pushing people out of our party. i think we should be letting people into the party. i think donald trump pushes a lot of folks out. i don't think he is the nominee yet, by the way, i happen to think that, as this gets closer to a one on one contest he has a tougher hill to climb. it will get to a one-on-one contest in my opinion. >> judd, that assumes -- saw somebody postulating that yesterday on twitter saying, look, if you have all of ted cruz's votes and all of carson's votes and you add up all the votes -- that's a big assumption that all those votes will go to some candidate that everybody else coalesces around. >> first off, i don't assume that. i think cruz stays in until the end and i think he keeps his core constituency. he can't get the nomination. ted cruz cannot get the republican nomination. he is not a trustworthy

individual. he is just not going to get the votes to do it. if this comes down to a ted cruz-donald trump-rubio or ted cruz-donald trump-kasich, i think either rubio or kasich can beat trump with regularity. the question is will that occur fast enough to allow them to get enough delegates to be competitive at the convention. it will be decided in the first weeks of march here. >> governor gregg, if it was trump or ted cruz and mayor bloomberg were to jump in, would you vote for him? >> i like mayor bloomberg, but he is not going to win the nomination. he is an east coast-west coast person. he will damage considerably the democratic party and i don't suspect he'll get in if hillary is the nominee. he might get in if sanders were the nominee. if cruz were the nominee of our party i could not vote for him. i don't consider him to be a person who is respectful of the institution of the presidency.

>> wow! but you back donald trump. that's something, judd. >> thank you to both of you. i love charleston. judd, bernie sanders, god all mighty. >> we're not sending you maple syrup. >> it's vermont maple syrup. you don't have ice cream either there, do you? >> unfortunately, we don't make ice cream here, but we also don't buy ice cream from vermont. >> judd, i'll take his share. >> okay. >> thank you. when we come back, apple's battle with the d.o.j. highlighting the broader tensions. apple is not alone. we bring you details after the break. a look at stories in the news right now.

a look at the futures. dow futures up 165 points above fair value. we had been up over 200 points earlier. strong green arrows across the board. s&p up by 19, nasdaq up by 45. "squawk box" will be right back.

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welcome back to "squawk box." apple, microsoft, twitter, amazon, tech names taking on big government. the tensions could not be higher. josh lipton joins us with more. josh. >> andrew, apple is dominating the headlines in the standoff over whether to help the fbi access the locked, encrypted iphone of one of the san bernardino terrorists. this case just one example. microsoft ceo also fighting the d.o.j. the government wants microsoft to retrieve emails held on a server located in ireland as part of a drug trafficking case. microsoft says the emails belong to the user and that the data is governed by irish law. in other words, the d.o.j. is

exceeding its authority. microsoft tells me the company is willing to take that battle to the supreme court if necessary. and then, there is twitter ceo jack dorsey. he is also going head-to-head with the d.o.j. he wants twitter to publish a report documenting government requests for user information in national security investigations. the government counters that twitter cannot publish the report because it contains classified information and the government wants the case dismissed. twitter tells me the government's motion will be heard in court next month. patrickmorehead of moore insight and strategy says one of the reasoning for the growing tensions is ed snowden. his revelations about the n.s.a. created for public scrutiny about the relationships between silicon valley and u.s. intelligence agencies. now tech companies are forced to dig in their heels and take on the government in court so the users are assured that big tech

is protecting their data. in contrast, the government counters that it needs the data to protect the very same users. back to you. >> thank you, josh. beyond apple's battle with the d.o.j. other hot topics including yahoo!'s search for bidders, and the 2016 election. jeff sonnen feld joins us. from the yale school of management. also a cnbc contributor. jeff, let's start with apple and get to the others. right or wrong? >> a daunting pile. thank you. >> let's start with tim cook. is he right or wrong? >> tim cook is right to take the position he's taking, up to a point. right now there is great confusion between the people, the position taking and the issues. classic negotiating disaster. he is taking a hard-line, which i think a lot of people are rallying behind. remember, back when sadly yahoo! had capitulated years ago to the

chinese government, added dissidents and there was a disaster. google pulled out of china rather than to capitulate to china's demands at that time. if he were to knuckle under too easily the integrity of the apple products and everything they've built in terms of privacy is up for question. but they do have responsibilities here. and part of this is we're overstating positions. it's a shame that these things are being done in public. usually these are done with private negotiations. i don't know why there wasn't a court order that was done under a seal of some sort. i had discussions with others the other day talking about how these things used to be on in the old days. these things were resolved quietly. it was al capone who said you can negotiate with a gun and a kind word better than negotiating with a kind word. perhaps the government came on a little too strong and apple had to put their backs up. >> you're suggesting that tim is disingenuous in his view here?

i think he's pretty genuine in his view, whether you agree with it or not. >> he is genuine. he is taking an absolutist position. i think the overstatement is comey is insisting -- you read the statement. i can read it to you right now. you summarized it well before. we don't want a back door. we're not asking anybody to give away the encryption code. we don't want the key. we just don't want the self-destructive wipeout of the system as our hackers try to get in there. it's a brand endorsement of how great their systems are but they want more time. they're not asking necessarily to have to write the code. they are saying just don't wipe out the system. that's what's being confused here. there is a -- there is opportunity, i think, to find some common ground to resolve this amicably. >> politico is saying tim cook emailed his employers saying

thank you for your support. we have no tolerance for terrorists what's at stake is the data security of hundreds of millions of law-abiding people. he says apple is a uniquely american company. he says we feel the best way forward would be for the government to withdraw its demands. >> i think it's a maladroit statement by saying that we have no tolerance for the massacres of terrorists but how can there be a but. how is there any way to qualify that statement? whose privacy is being protected here? this system is owned by the county of san bernardino. that's whose privacy should be protected. the county -- because they own this equipment. your email at work, mine at work, we don't have the same privacy protections as if we owned the systems. this was their equipment and they said go at it. whose privacy is being protected? the users were borrowers.

they were not the owners of the system. the county of san bernardino tells the fbi, come on in, they should go on in. i think this is a problem. all they need to do is have more time to be able to hack their way in. that's the issue. for the government to hack their way in. they'll get in eventually, but they need that time. >> jeff, while you're here, two other subjects real quick. yahoo!. state of play there. what do you think is really happening? yahoo! says there is no division between marissa mayer and the board but they created an independent committee on friday. >> cany transactions committee r executive committee for this kind of negotiation would not have the chairman -- would not have the ceo on there. you want it to be an objective, independent -- it's a very good board, by the way. it's not like the darden board which the activists chasing them

effectively. these are former ceo of walmart, the senior person at eui. they're doing the right thing. the company -- the revenues are up 8% over last year. their profits are quite impressive. i think their profits are around a billion dollars with their -- their gap revenue is up about $5 billion in revenue. and their new products -- people have faulted them for opportunities they've missed. surely there have been a lot. but you take a look at -- just the tumbler business since they've bought it. people said they could have done more. maybe they should have. it's up 50% in the few years since they bought that. they've moved into a focus on mobile video and social content. they finally got that focus. while marissa is doing the short-term focus on managing the business they're bifurcating for the board to look long-term at

comcast -- we love comcast, might be a buyer. aol has moved into verizon, keeping tim armstrong the ceo on board. they're very happy. they would love to bring her in, i am sure. at&t, many great possibilities to land this company properly. so it doesn't go the way of excite at home and all these other failures of an earlier era. this is the time they need to bulk up. i think there are strong possibilities here. >> final question for you. the governance situation at viacom. just a conflict? complete and utter? >> it's a huge problem. i am still uncomfortable talking about that one in particular because the compensation committee, i know every member on the compensation committee at viacom. they often speak at events with me. i am bewildered as to how they

could give him the payouts with the terrible performance. far more than that issue, the board has not been alert and perhaps not even -- perhaps even negligent in not ascertaining the competence of some of the red stones. the court may rule that he is not fit to lead the company, and then his 80% control goes into a trust. that trust will get rid of doughman right away. his daughter is in the horrible shakespearean twist here, is to try to unravel excessive gifts given to a mistress. she had him recently -- he retracted those gifts, so to have him condemned as being unfit for independent judgment would -- would lead all those gifts to be transferred to the former mistress. subsequently, he doesn't seem like he is fit to serve from the reports out there. that would allow the foundation to take control, or the trust to

take control. >> jeff, thank you for helping us sort through so many different issues this morning. appreciate it. back to you soon. when we come back, what's up this morning. house majority leader kevin mccarthy is our special guest. "squawk box" will be right back. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities.

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lumber liquidators continues its slide towards microcap territory. it is taking quite a hit today on a report from the cdc, which i think they updated this saying the risk from cancer to certain flooring materials is actually greater than originally thought. over 60. i don't know what the -- high looks like about 70. it's at 14 now, worth under 400 million. the bank reported 2015 profit that was flat versus a year ago of hsbc. says it sees a bumpy financial environment for the rest of the year. house majority leader kevin mccarthy our guest. the race for the white house. silicon valley chimes in on the ceo debate. scott mcneilly joins us. "squawk box" returns with all that in the big hour ahead.

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leaders do not agree. the brexit debate heats up. decision 2016. weekend wins for hillary clinton and donald trump. what's next in the race for the white house? house majority leader kevin mccarthy is our special guest as the final hour of "squawk box" begins right now. ♪ so you've got to let me know, should i stay or should i go ♪ >> live from the most powerful city in the world, new york, this is "squawk box." ♪ you're happy when i'm on my knows ♪ welcome back to "squawk box" here on cnbc. i'm andrew ross sorkin along with joe kernen and rebecca quick. all three of us together. we're less than 90 minutes away from the opening bell on wall street. look at the futures. they're looking up. dow opening up higher, 107 points higher. nasdaq up 45 points. check out the price of oil the gold at this point too as well. we should tell you, that's down almost 2% this morning. joe.

one of the stories investors will be talking about today, a new report from the international energy agency predicting the u.s. will lead the world in oil production increases by 2021. that's five hours away. the call is notable because until now the u.s. has taken the biggest hit in production amid lower commodity prices. in oil prices this morning, they continue to surge. a dollar is a lot when it's at $30. we're actually closing in on $31 for wti and almost $35 on brent. news out of europe. debate about a possible brexit. it's an exit but it's britain. it's bic a bro would be a bra for a man. sort of similar, i think. a grexit was a greek exit. david cameron has a referendum say the. ahead of that london mayor boris johnson says he'll campaign for britain to leave the union.

pound falling sharply against the dollar, the biggest decline since 2010. i like that. becky just got back. i am on my way. >> i missed it. >> you did. i am on my way. >> came back yesterday. >> the dispute between apple and the fbi over the tech giant's encryption technology is escalating. the fbi wants apple to create software, write some code, to unlock the iphone that it's tried so hard to not allow to be hacked. anyway, that would allow one of the san bernardino shooters and some of the info that's on the phone to be accessed. in a new email to employees tim cook says, in his words, in the wrong hands the software would have the potential to unlock any iphone in someone's physical possession. ted olson over the weekend said it would be basically -- could be the end of the iphone. more on the story with former sun microsystems scott

mcnealy coming up in the next half hour. few stocks to watch. yahoo!. "new york post" reporting that the company is half-heartedly putting itself up for sale and has hired advisers to defend itself. auto nation adding $250 million to its staff buyback program. let's look at that stock. here it comes. auto nation is up 2.6% on that news. hsbc posting a $1.3 billion loss for the fourth quarter. the main drag, slowing growth in china and tumbling commodities prices. that stock down by almost 3%. in washington news today, the supreme court holds its first hearing since theet d deaf justice scalia. it leaves the court with eight members. hampton pearson joins us with more. >> in that first session of the

court without justice scalia gets under way around 10:00 a.m. eastern time. we have people already lined up for that. we are told that there will be no opinions on cases that have already been organized today and no orders issued regarding the status of future cases. the justices did not hold their normal friday meeting in part on last friday due to the ceremony, of course, that went on here at the court to honor justice scalia, a ceremony that saw thousands of people lined up all day around the block for the chance to pay their last respects to the late justice. and of course, on saturday there was wahat was supposed to be a simple mass honoring him. it attracted 3,000 plus people including current and former supreme court justices and other dignitaries at the largest roman catholic church in the u.s. now back to reality, life on the court without justice scalia. what lies ahead.

frankly, the court has yet to hear argument this term on some of the most controversial cases that were actually on the calendar. issues like affirmative action, immigration, obamacare for the fourth time, even abortion. so the question is, in those cases where we could have 4-4 ties, what does that mean. in the case of a 4-4 tie, there are two options. we could get opinions from the court that essentially say the rulings are affirmed by an equally divided court. in that case the lower court decision would stand. the other option, court observers say, though, is the justices could decide to wait until there is a ninth justice, if you will, and let those cases be reargued during the next term. of course, given the politics of this particular nomination site, there is no guarantee we would have a nominee by then. it could be in fact a year from now before we get that ninth justice. there are two cases on the

calendar today. one essentially is involving some -- a dispute over some set-aside contracts involving the veterans administration. the other case involves search evidence involved in a criminal law case. but today, the beginning of life on this supreme court without justice antonin scalia. back to you. >> thank you very much. to the race for the white house. donald trump winning his second consecutive presidential primary this weekend. marco rubio and ted cruz trailing behind. then there is jeb bush, the former governor suspending his campaign after a disappointing performance. joining us is kevin mccarthy. the house majority leader and thank you for being here today. >> thank you for having me. >> starting with presidential politics. this is where our minds are on so much of this. >> everywhere i go. >> do you have a preferred presidential candidate? >> i have not endorsed in the race. >> is there anyone you feel uncomfortable with who is running for the republican nomination? >> not in the republican. i can work with anyone on the

republican side. i think whoever wins the republican nomination will want to be successful and work with us. in the house that's why we're coming up with an agenda to actually help whoever the nominee is. i believe the field is norroi , narrowing. i think it will be over after march 15th. i think it's a two-person race between trump and rubio. i thought cruz had a good chance of winning the nomination but i don't see the math working out for him when he didn't win south carolina. >> in terms of the delegate counts? >> yes. things move so fast. that was his plan, the evangelical vote. if you look at the states coming up and where you're going, it's more difficult. i give trump a 50% chance of being the nominee. i give rubio a 35%. >> what about the money factor? i have heard cruz is actually in a better position money-wise than rubio. >> cruz dollar for dollar spent better outside a campaign. it's tough. in part, the changes here pretty

soon, it's winner take all. >> it wasn't winner take all in south carolina but trump got all the delegates. everybody out there still needs to win 1100 or 1200 more delegates. a lot of time still. can you get the momentum with the sec? can you spend enough in the different states? can you get your message out. >> momentum matters. >> you want to talk about your agenda for the house in a moment. before that, let's talk about what people have been saying, this idea that there are outside candidates that would make it harder for your party to be in -- maintain control in the house. obviously that's your job. i just wonder if you've done planning on any of these potential eventualities. >> i am from california. i was the republican leader out there when we had a special election. this feels a lot like that. the momentum when schwarzenegger ran for governor. different people coming into politics before. everybody thought that couldn't happen. it's kind of ironic that they

took arnold to replace trump in "the apprentice." the country is so fed up with everything that's happened, they want a -- they want to clear the slate. normally we go to governors. i've believed governors is a better training ground. you have to make a decision on a bill at the end of the day. you run agencies you didn't create and have to make them efficient. that's not where we're at today. it's a different environment, a different time. you have to get your head around that and find what is the best place to move this country forward in that situation. >> let's talk about your agenda, because there are plenty of people who think nothing can get done in washington until this race is decided. what do you say to that? >> if it's just up to the house we could get so much done, and we have. then you deal with the senate. then you deal with the president. it's much different. but the house is not sitting back. we know realistically, even though we passed certain bills, there are tax bills, health care, the president will not sign that.

that doesn't mean the time line that we shouldn't put out our ideas to the american public. and whoever becomes the nominee can grab this agenda for poverty, economics. reg reform. tax reform. when ronald reagan passed tax reform, it wasn't his plan. it was jack kemp's plan. we're trying to change the house to become a place of ideas. >> it sounds like an admission that nothing will get done with this group of players because they have fundamental disagreements on where the country should be headed. >> that's the case in other bodies but not inside the house. the house will still move ideas. >> you can't do it with the other two bodies. >> i question, after the passing of justice scalia, what happens in the senate. do they shut everything down? they weren't really moving much anyway, but i think that will play into the rest of the year. >> let me ask you about that. in terms of replacing justice scalia. >> mm-hmm. >> you're convinced that the

president should not nominate somebody? >> i think you're sitting at a time that we're really at a different conventional time in the country. and the people are more engaged. more people are coming out to vote. more are watching debates. power does not derive from government. it derives from people. let's give people a voice. it's a unique opportunity to give them a voice. >> for better or worse, depending on where you stand, we elected a president for four years. he has a job to do. you have a job to do. everybody has a job to do. why wait? >> well, everybody has different branches. i can go back and say, i'm listening to harry reed in 1985. schumer. president barack obama as a senator. i think, in this time and place, it won't stop the supreme court from hearing cases. so you have that. you have a different branch of government. the senate has a right to do a check and balance. i think the people should have an opportunity here to have a

say. you could have an argument on both sides. at the end of the day it will propel whoever goes in to have a stronger court. >> we keep thinking every election will be the deciding factor where we really figure out which direction america wants to go. >> every election has been building to this election. 2010. 2006, the flip of the majority to the democrats then the flip so fast back to republicans then the flip in the senate. now you're going to the third level, the presidency. since barack obama has been president there have been -- more than 900 seats have flipped. congress and senate, if you look at those, that's the last top of the pyramid is the presidency. it's all driven from the bottom up. why would you try to force the opposite to it. it's like going against the current. >> what is your top priority that the house will be setting?

i if you have one issue that's the most important, what is it? >> i think tax policy. growth solves so many problems. growth helps you. we have been so stagnant. it's frustrating. you look at participation rate. so many people stuck in poverty. growth in the answer. it helps in so many places around this country. >> it feels like we have gotten so close at times with this idea that you're going to find something -- >> grabbing ideas that the president has in his budget, and he wouldn't agree to them. it is the most frustrating -- i think when i went into congress i was all brown hair. it is the most frustrating time that's ever been. >> do you feel like we get a reset? that this is going to be something we get things done? >> i give a lot of credit to our speaker. he has changed the direction and the trajectory of the house. it is becoming the idea place.

with everything that's going on in politics, i think people will turn back, the house will have greater strength. what they're doing, they're doing what the people want them to do. here are ideas, plans, legislation, here's really solutions. >> leader mccarthy, thank you for coming in today. coming up when we return. london's mayor taking a stand answer the uk prime minister, speaking in support of a brexit. the currency market is reacting. pound trading down more than 2% against the dollar. analysis and more straight ahead.

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welcome back to "squawk box." u.s. equity futures looking up. the markets look like they be opening much higher. dow looks like it's opening 171 points higher. nasdaq up 46 points. also making headlines, john regus being freed from prison. he was convicted to 12 years behind bars over a fraud that led to cable companies' collapse. i covered this case years ago. a federal judge ordered his release from prison because he is dying of cancer. it was a remarkable case. coming up, the brexit battle, the rumors.

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welcome back. news out of london this morning. u.k. prime minister david cameron set a referendum on ewe e eu membership.

boris johnson says he'll campaign for britain to leave the european union. it looks like this is something that the markets here are not too concerned about just yet. the currency markets obviously over there showing a little bit of alarm. >> absolutely right. the currency market sterling is having its worst day for over a year. off over 2% at the moment, getting close to the 140 level. a year after the u.k. general election. a significant slide in sterling and particularly today a 2% move. not just equity markets not responding in u.s., also the equity market in london is not responding. the ftse 100 is up today. alongside other european equities as opposed to moving in line with sterling. let's cover a little bit more of the developments this weekend. as you have said, the most

high-profile member of david cameron's own party to go against cameron saying he will back the exit camp is boris johnson. he has the ability to galvanize a lot of support and david cameron was hoping to convince johnson is back him which has not happened. what did he secure from brussels late last week? probably not enough to change most swing voters' minds. it was enough for him to think now is the time to set the date. the 20th of june for the referendum. he secured that britain would no longer have to be part of the praise ever closer union. johnson arguing it doesn't have a legal phrase. that it doesn't appear in many laws and there are an increasing number of laws coming from the unelected european commission which are reviewed by the unelected court of justice which are hindering british ministers

ability to do their job. that's what this comes down to. we hear a lot about migration. this is a southevereignty issue most voters. we can expect to hear more on that topic between cameron and johnson. if the scottish referendum vote a year and a half ago is anything to go by we can expect the polls to narrow approaching june and for sterling to continue with be weak and volatile. back to you. >> it's a little weird. you have the euro. 13 currencies in the european trading bloc. they're still on the pound. it's such a mass to try to figure it out. we'll try to. for more on the currency move out of the u.k., let's bring in managing director at bks and cnbc senior contributor. i didn't understand why the euro

wouldn't sell off on this in sympathy with the british pound. that's what makes it hard to figure out. they still have the british pound. if the dissolution of the eu is more likely why isn't the euro in and the dollar gets stronger and we're back in the soup again with our multinational. >> the euro is down this morning 0.5 or 0.6%. sterling is down 2.plus percent. this could mean the dissolution of the european union. in terms of the euro itself there are a lot of people who had already been short euro. >> you mean euro down against a basket of currency, not the dollar. >> last i checked it was 11020, which it down on the day. with regards to the european union, i think -- and the euro itself. a lot of traders were short

euros. the risk aversion in the markets is creating a demand to liquidate out of their short positions. you have this tug of war for the euro and sterling that in the near term, at least june, the currency is very much a sell on rally. you'll have the opportunity to see the sterling break 140, for example and sterling trade below 110, not far from current levels. >> i am excited because it gives the fed another mandate. the same as the number of people in the eu. this is a 26 mandate possibility. a brexit. we can't raise now. we can't have the dollar get stronger. they'll wait until june now to see -- >> that's why u.s. markets are holding okay. perhaps they're looking at that. ultimately. cameron's play will backfire. he should have tested the markets -- or tested the political environment to make sure they accepted the terms before setting the date for the

referendum. by setting the deal and immediately announcing a referendum date he's caused for conflict than anything else. >> so, in your view, do you say that they stay and the euro union plods -- and it's not going to dissolve in five years. it will be there but it's just tough going, tough sledding. it's hard to run a union without a central fiscal authority, right? but they'll continue to plod along with slow growth. >> absolutely right. the question is what's the trade. the trade is clear. while the political landscape is not very clear, i think, in terms of the opportunity for investors, sell uk assets, sell the sterling. that seems to play, on the euro. >> why not think it could be better off outside of the union. >> uncertainty is never good for currency. that's the focus right now. >> kathy, thank you.

coming in on short notice. appreciate it. coming up. it is a deal for real? we'll break down the risk or opec. ihs vice chairman joins us next. [vet] two yearly physicals down. martha and mildred are good to go. here's your invoice, ladies. a few stops later, and it looks like big ollie is on the mend. it might not seem that glamorous having an old pickup truck for an office... or filling your days looking down the south end of a heifer, but...i wouldn't have it any other way. look at that, i had my best month ever. and earned a shiny new office upgrade. i run on quickbooks. that's how i own it.

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♪ welcome back to "squawk box," everybody. let's look at some stocks in the news this morning. first up, food service distributor cysco buying breaks group. the price, $800 million excluding assumed debt. breaks currently owned by deign capital. quarterly profit of 36 cents a share. revenue was below forecast. the distributor sees current quarter profit largely around consensus sending shares higher in pre-market trading up 2.1%. synchrony financial a

positive mention. it could gain 40% this year. it's been seeing strong loan growth and the stock is higher premarket. >> milk distributor? dean foods. it's not a milk manufacturer, really. we know who does the manufacturing. >> the cows. >> elsie the cow. that's one way of calling it -- >> they take the milk from the cows and give it to you. >> right. rubs the lotion on its skin. >> why buy the cow when you can -- i know. >> it's from -- >> it's from "silence of the lambs." >> my mind is in a bad place. media news. taylor swift loans money to kesha for her legal battle. she sued the producer for sexual assault in 2014. a new york judge ruled she still can't break her record contract. other stars, including lady gaga

outspoken in support of her. swift is the first one to donate. what's so funny? >> is it kesha number one? is it kesha? it's not arena. >> she performs in arenas. >> did i say kesha or keisha? >> i think it's kesha. >> does she have a song she sings. >> spotify, baby. get on it! >> i'm going to play you a little kesha. >> do you know who -- do you know who i am listening to now? honestly -- you have to -- kendrick is amazing. >> i'm walking around and humming his songs. nothing he says, can you say. i am starting to sing and i'm like -- >> careful! >> he's like a genius. >> are you excited about the miles davis movie coming up? >> i didn't know there was one. >> yeah. it's going to be pretty amazing.

what are you doing? >> i'm getting you a little -- >> i don't want to hear kesha. big game this week, seriously -- >> have you heard this before? ♪ ♪ i hear your heart beat to the beat of the drum ♪ >> i don't want to hear it now. >> we don't have a license for this. i'm going to stop now. go ahead. it's awful. that's all i needed to hear, that much, to know how bad it is. sounded like katy perry. in squawk sports news. daytona 500 is literally where the rubber hits the road. we said this before. the nascar season kicked off sunday with the 58th running of the great american race, and it proved to be an exciting finish. we go to the final lap again here, with a pack of cars bunched up heading for the checkered flag. denny hamlin and martin truex jr. neck and neck crossing the line. hamlin wins by inches. a photo finish shows hamlin

edged out truex by .001 seconds, the closest finish in the history of the daytona 500. >> where do they have that? >> daytona. >> where is grant buried? >> grant's tomb. okay. watching oil prices -- >> go ahead. >> getting my interest in oil, wti trading a little over 30 bucks. major industry conference in houston this week. among today's notable speakers. the secretary general. vice chairman at ihs joins us. dan, thank you for joining us. what do you expect to learn today? >> i think what we'll learn today is what the view is on how the market is -- at what point does the market rebalance? later in 2016 or is it 2017. we'll have the head of opec, the head of the international energy

agency, which just released its new outlook that talks about a market rebalancing perhaps in 2017. >> what is the yergin. >> that it's somewhere late in 2016 or in 2017 that we'll see a market in balance. it won't look like the market that it is today. the big issue, in addition to what the producers do, is what happens to u.s. production and what happens to all these inventories all over the world. >> walk us through the permutations that get you to your analysis. >> we are going to see a continual decline in u.s. production by summertime. secondly, the fact that there will be demand growth. and thirdly is, of course, that the producers themselves have kind of said -- are beginning to say enough is enough and they have to do something. they're not talking about production cuts, but they are talking about a freeze, which

gives you some stability in the market. >> have we overstated or overspoken the issue around iran, meaning how much they'll actually be able to bring online? >> our view has been that they would be 400,000 or 500,000 barrels a day. some people have said a million barrels a day. the new report says 500,000 barrels a day. if that's the case, once it becomes clear what the level of iranian exports are, i think that's what makes it -- going to make it possible to kind of get this freeze to work among the producers. although the russian energy minister over the weekend said the freeze was going to start on march 1st. the saudi minister said last week that it will take a few months and he will be speaking tuesday morning. so everybody will be listening carefully to his words. >> how much breathing room, or not, does the saudi ipo bring?

>> i think that will take a long time to do. if you look at the ipos of the chinese companies, there are a couple of years in preparation. i think this would be very complex to do. it's hardly something that will happen overnight. and i think they have to determine what the ipo of the whole company or downstream elements. there will be a lot of discussion. i mean, i think you're talking about a couple of years. >> dan, is that real or a ploy? as part of a bargaining chip in the larger conversation about the price of oil and production? >> i think the ipo talk really has to do with the reform program that the deputy crowned prince is pushing in saudi arabia. in a couple of weeks they'll announce their big transformation plan which is intended to make the economy less dependent on oil, change the economy. i think this is an element in it, but i think it's complex for them to figure out how to do it

and what they'll really want to do. >> dan, we'll leave it there. appreciate your time and perspective. good luck at the event. >> thank you. coming up, to lock or not to unlock, that is the question. apple's fight with the feds. intense debate about personal privacy and national security. tech veteran scott mcnealy weighs in next.

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to help set your mind at ease. know that planning for retirement can be the least of your worries. with the guidance of a pnc investments financial advisor, know you can get help staying on track for the future you've always wanted. apple continuing to resist court order to help fbi unlock

the iphone of one of the san bernardino shooters. >> the war of words is continuing. even this morning, early today, apple ceo tim cook sending an email to apple employees explaining the company's thinking and thanking them for their support. here is what he said in this notice to employees this morning. this case is about much more than a single phone or a single investigation. so when we received the government's order, we knew we had to speak out. at stake is the data security of hundreds of millions of law-abiding people and setting a dangerous precedent that threatens everyone's civil liberties. that statement on the heels of a statement from fbi director comey last night, posting late on a legal blog. what comey had to say is this. we don't want to break anyone's encryption or set a master key loose on the land. i hope thoughtful people will take the time to understand that. so this battle is not de-escalating anytime soon. on friday, guys, we had a notice

from the house energy and commerce committee. they've invited cook and comey to capitol hill to testify at their earliest possible convenience. we don't know yet whether apple and the fbi will accept that invitation, but clearly congressional hearings now are a possibility in this dispute that seems to be escalating, if anything, not de-escalating, joe. >> thank you. we'll get a different take now from tech man scott mcnealy. i said "weigh in" that's good for me to use the name of your company. scott and former ceo of sun micro. good to see you. >> we won't call you out on trademark infringement. >> exactly. you have an interesting take here. it's a cynical take to some extent, scott. you say that really we should get over this whole controversy because already there is no privacy anywhere, and we should just accept that we have given

up our privacy in this new world. >> i wouldn't say we should accept it. i think we should understand. there are multiple aspects of this. first of all, you know, absolute anonymity breeds irresponsibility. if you have total privacy it's sort of like being invisible and your civility tends to drop when you are operating absolutely invisibly. there has to be some, in many cases, not all -- there should be some areas you should be allowed to be invisible, but there are other times when an audit trail is necessary to drive civility. the second thing going on here is that apple has a master stroke here. they're looking like they're for the privacy and liberties of folks. i think they're also quite worried that any business in china will go away if the chinese government thinks that the fbi can hack back-door into a phone that is sold in china. an apple phone sold in china. there is a lot of business.

i know when huawei was banned from the u.s. networks it created a negative balance on the u.s. trying to sell into the chinese markets. there are economic as well as p.r. reasons for what's going on here. the most unusual and fascinating to me is all the privacy rights and liberty folks are going crazy about this. i understand that. i get that. i like that. i like liberty and freedoms also. but at the same time, there is a whole bunch of them voting for bigger and bigger government. what this is all bringing out is that people are getting scared of the government because the government is running their health scare, their financial services, they've nationalized student loans. they do audits, redistributing two-thirds of the federal budget, taking money from people who earned it and corruptly buying votes to redistribution to other voters. people are -- what the privacy

issue is, is we are now scared of our government. we aren't squared cared of veri at&t. we're not a'fraid we're not afraid of them. holy mackerel, look at the data the government has on you. that's when you have no privacy. i say, to get over it, vote for smaller government. >> you get to that fairly effectively. those are some good numbers that you give. so -- and i know the people you're talking about. the silicon valley tech titans that are carping about privacy, you know, they're having dinner with the democrats whenever they come out to silicon valley, and giving money to that side of the aisle, which makes sense for privacy, but given the other points that you make, maybe not. not all of them. there are others that are out there that are not as lock-step with the democratic party but

most of them are. >> there is massive hypocrisy to vote for larger, more intrusive, more corrupt government that knows more about you and every aspect of your personal life and then scream and holler about the fbi wanting to get into a single phone that -- hack into it, with a known terrorist. >> right. and i don't know how you -- what's it called? how do you square the circle? >> square the circle. >> why do you want to square a circle? >> trying to put a round peg in a square -- that's one. >> so scott, in your view -- let's get back, because i like when i have you on because you're so outspoken on this. what's the government's actual role in a free society? we're at about -- i don't know. it used to be 7% or 8% of the gdp back in the turn of the 20th

century. 1908 or 1909, 6% or 7%. now we're up over 50%, i think. it's unshrinkable. you can't take away anything that's already been lost. or take away anything people have already gained. even obamacare will be tough to reverse. >> it's very hard to sell the power of the proiivate sector a clapt capitalism when you have classes taught by tenured professors. they're not giving capitalism in the private sector the accurate and true value. so you have a lot of voters who have been taught that free and free, that a right is something you can give everyone without taking from anyone. and so many of the things you hear politicians talk about as rights for citizens are not rights. they are redistribution. i don't know how you get -- when people can vote for a living as

opposed to work for a living. i had a conversation with a parent the other day. he was saying, i have my children out there. they're wonderfully chasing their dream. i said, you know what, i want my children -- i educate them every day -- i want you chasing a job, a tax-paying job. i said to this guy, i wish you would stop telling your kids to chase dreams. what's going to happen is my boys who have chased jobs are going to fund the fact that they are chasing a dream and aren't getting a job and paying taxes and taking care of their families. i think we have to move the whole focus away from all of this self-actualization to go get a job. we have the lowest participation rate in 40 years. everybody is running around saying, things are fine. let's give away more free stuff. i don't know. i get pretty frustrated with it. >> right. that's a good point. yeah. i was thinking -- i'm not going to say it. anyway -- anyway, scott, we

appreciate it. and we haven't seen you in ta while. hope to see you again too. >> did you make the cut this year? >> i didn't. i was so far from making the cut. and i -- i see on the internet where it says that -- the amazing video that helped people over 50 regain their tempo in their golf swing. i think there is something to aging and tempo. i have no -- my arms and my body are out of sync. >> you don't play that often. >> i don't play that much. i have no muscle memory. you are the exception to the rule. your tempo still looks great. i'm -- it's like i have never played the game. >> pilates and yoga. at least you're still playing. i am formerly famous and important and i don't get invited as much anymore. >> we do the show from out there and we get some great guests and stuff like that. it's a good symbiotic relationship. it has nothing to do with golf, scott. >> keep weighing in, buddy.

>> thank you, scott mcnealy. see you around. when we return we talk to jim cramer. he joins us from the new york stock exchange. we'll talk apple, oil prices, brexit fears and much more. brexit fears and much more. look at the futures, dow is up about 176 points, s&p up about 20 points. stay tuned, you're watching "squawk box" right here on cnbc. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. ♪

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. let's get down to the new york stock exchange where jim cramer joins us now. there are still results coming in, jim, even though we got most of them out of the way last month. but what are the most important ones for the week? should be interesting to see macy's, i guess. >> macy's, i don't know. after listening to vf corp the other day, i felt they have a lot of synergies. i don't know how good macy's can be after that. a lot of retailers are hurt by amazon and don't want to admit it. the only one that will go unscathed is home depot. that stock is trading up in premarket because it makes sense. i would have said lowe's, too, but they made a canadian acquisition that they have to

explain. >> we are talking about a possible brexit, that would be negative for the euro, fed has to watch this now. >> yes. i think that's a correct read. a lot of what -- of the optimism that i feel is that the dollar would have finally peaked. this thing happened. i don't think it will pass. it doesn't matter. all these things get sorted out. when they get sorted out, they hit our market. it makes me want to be less willing to buy the opening, which is derived out of europe, not out of us. the endless, okay, oil is up. it's good. i'm starting to get tired of it. >> i'm wondering about oil. isn't it worth 30? can't you nibble at 30? >> if you knew where the supply was coming from. there's still so much supply just sloshing around everywhere. and $30 is just a big loser for everything from canada, from

denver, from a lot of places in the bakken. $30 is not a great price for a lot of these companies. you see the only thing they're drilling on is oklahoma and permian properties. everything else doesn't work. $30 is a great level for the consumer, not a great level for the oil companies. >> game of the week, wednesday night. are we going to bet? ville villanova/xavier. both of them 24-3. the only two teams in the country, 24-3. >> i worry that nova is a soft one. i love them, but i worry. that's the game i've been worried about on that schedule for a long time. otherwise the route to the final four goes through the east, barclays, philadelphia. >> cintas center on wednesday night. i think it's early enough for us to watch.

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victoria stilwell, you appear on tv working with canines. are you a dog lover, watson? i do not own a dog. but i work with veterinarians. how do you do that? i help them analyse over one hundred thousand pages of medical studies. that's great... 'cause they can't exactly tell us what's wrong with them. isn't that right, rusty? rusty. who is a good boy? who is a good boy? you are. yes, you are. watson, i think you need to work on your dog voice.

>> this date in history, on february 22, 1980, the miracle on ice took place in lake placid, new york. the united states hockey team, the upset winner over the soviets, 4-3. the u.s. team went on to win the gold medal. a lot of people don't remember that they did have to -- was it sweden? someone like that they had to beat in the final. finland it was finland. we'll never forget, al michaels, a guy like that there for that. i remember where i was, too. >> do you? >> skiing in some crappy place up in vermont, as i recall. i was at school on the east coast. 1980. i remember i went up there. >> was funny. i've seen them talk about it before. they didn't know how to pronounce the russian names. they said pick something and

stick with it. nobody else knows either. who would ever do something like that? >> not us. >> no. "deadpool" dominated the box office this weekend. look at the futures before we go. you will see the market is sharply higher. dow futures up 188 points. >> bye-bye, join us tomorrow. "squawk on the street" begins right now. good morning, welcome to "squawk on the street," i'm david faber along with jim cramer. we're live from the new york stock exchange. carl quintanilla is going to be here later in the next hour. he's got those girls and school. always something that you have to be at if you're a dad. looking at futures, there you can see we are set up, as you just heard on "squawk box," for a much higher open. european markets have been positive. the european banks have been showing signs of life. germany's dax,