live from new york, where business never sleeps, this is "squawk box." >> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and andrew ross sorkin. we're going to start with the markets. it was a leap year jinx for stocks yesterday. you saw the losses yesterday push the s&p 500 into negative territory for the month. that is the third straight monthly decline for the s&p and for the nasdaq. take a look this morning. you'll see things are setting up to turn around at least a bit. the dow futures indicated up by 121 points above fair value. the thatnasdaq up by 36. overnight in asia, the hang seng and china's shanghai composite both closing up better than 1.5%. japan also closing higher. the nikkei up by about 0.3%. in europe in the early trading, there are some green arrows across the board. big gains for the dax, which is up by about 1.5%. in italy, that market also up by about 1%. also, we're keeping an eye on the price of crude this morning.

you'll see right now it's up over 1.3%. all the way up to $34.20 a barrel. >> we'll tell you about some of the big stories we're watching this morning. new york fed president sounding cautious about raising rates in the future. he said the drop in oil and other commodity prices as well as tighter financial conditions could lead to slower growth and weaker inflation. the balance of risks may be starting to tilt slightly to the downside, but he's only slightly marked down his growth forecast to about 2%. u.s. treasury secretary jack lew saying commitments by china and other countries at the g-20 meetings have reduced the risk of currency devaluations that could fuel turmoil in global marks. lew says beijing has given a clear signal it won't engineer a major devaluation of the yuan. and a little bit of deal news this morning to tell you about. new york stock exchange owner ise now confirming it's considering a bid for the london

stock exchange. this could counter that offer by deutsche boerse. no approach has been made so far, and no decision has been made as to whether to pursue an offer. they'll have to tell us a lot more about what's going on. constant flow. >> in political news, it is super tuesday. 12 states and hundreds of delegates and seven candidates are all hoping to stay in the race. historical historically, this is a showdown that has ended campaigns in the past and has solidified others. for the republicans, texas is an important one. it's the only state where druond trump is not expected to win. for the democrats, bernie sanders is hoping to stay competitive in the race against hillary clinton with wins in the midwest, perhaps in texas, and massachusetts. a full analysis of today's primaries is coming up right at the bottom of the hour. >> and we got a court case to tell you about.

this is the apple case. in new york, a federal judge saying the u.s. can't make apple unlock a drug dealer's iphone. this is different than the san bernardino situation. but ayman javers has more on this ruling and what its impact could be on that apple and fbi debate. >> good morning, andrew. this was a big win in court yesterday for apple. the judge here in the eastern district of new york ruling that ultimately he was unimpressed with the government's argument that the 1798 all writs act applies to this particular case of the unlocking of an iphone of a drug dealer in new york. the judge suggesting congress is a better place to adjudicate this than the court system. here's what the judge said. the assistance the government seeks here bypassing a security measure that apple affirmatively markets to its customers is not something that apple would normally do in the kconduct of

its own business. the ruling came down last night. apple had a gleeful reaction. an apple executive telling reporters last night that the burden in this case was actually lower than it is in the san bernardino case. that gives apple confidence going into that court battle. of course, the government said it was disappointed here, plans to appeal. we'll hear a lot more about all of this today, guys, because on capitol hill, they're holding a hearing. fbi director james comey will be up there. also, apple's general counsel testifying about their arguments in the san bernardino case. congress waiting in the wings here, not necessarily ready to weigh in. the judge here in this case seeming to suggest that congress is the better venue for all of this. >> eamon, how much do you think this would weigh on what the judges do out in california? the reason i ask is there is a view that this particular judge has had a predisposition towards

the apple case or apple's argument from the beginning. if you remember, it was this particular judge who actually asked apple to weigh in, in a way that was somewhat surprising, given that these things don't normally happen that way. >> yeah, i think legally there's no bearing here on what the judge in california can do. that will go through a separate process up to the ninth circuit on the west coast. legally here, you know, there is some precedent established. mostly, this is the battle for political and public opinion now at this point on capitol hill. going into this hearing today, this gives apple some wind behind its sails here in its argument that what the government is asking is simply o onerous. but you're right. this is apple iphone running ios 7. technically, there are some differences in terms of how apple would go about accessing this. what apple is saying is the government is asking it to do more in that san bernardino case. similar but different cases.

>> eamon, if congress were to get involved and write a law that somehow stipulated that technology companies in situations where there's some kind of terrorist threat would otherwise be demanded to help and write code and manufacture, do whatever is supposed to happen, what would that do internationally? >> well, that's tim cook's argument. if the united states government says this, what's to stop other governments around the world from doing that? what about the chinese government? what about the russian government? tim cook also said in his nationally televised interview, where does that stop? if the government can order us to create code to do this particular thing, can they order us to create code that would turn on the camera in your iphone that, would turn on the recording device, that would monitor you? what about other devices in your house? where does the slippery slope end? that's the question that apple's been asking. the government says, well, look, we have a whole 200-year history of sorting out the balance between privacy and the

government's right to investigate here. ultimately, if we have a search warrant, we can search your bedroom. why can't we search your iphone? >> one final question for you, eamon. there have been reports over the years, though none confirmed, that apple, when they went into china, ultimately had to share code or do something. not create a book door for the chinese -- >> they had to put them on china telecom servers. >> what is it exactly that the chinese government might have access to, for example, that the u.s. government doesn't? >> it's a really good question. i don't fully know the answer to that. becky, you're right. there was an article in the "l.a. times" last week laying out the fact that apple had actually put some of its data on government-owned servers in china the a the request of the government there. they've submitted some of their apps and some of their product to inspection by the chinese government over there. so the question is, what are they allowing the chinese to do that maybe they're not allowing the u.s. government to do, and does china cooperate with some

of these authoritarian -- i'm sorry, does apple cooperate with some of these authoritarian regimes around the world? that's a question i don't fully know the answer to, but you can imagine the u.s. government will be asking that of apple. >> and if they already do, does that change the equation in terms of how we would approach the public policy issue? >> it seems like it would have a huge impact on the debate if we knew apple was doing things for the chinese government that they're refusing to do for the u.s. government. as of right now, we don't know that. but if that became a plain fact in this debate, it would definitely alter the debate. >> eamon, appreciate it this morning. thank you. >> the markets look pretty good. i didn't realize -- i thought february was better. horrible january. then it must have started out scary in february. like it was going to continue. then it stabilized for the last couple weeks. we ended up basically unchanged. down in january. we'll see whether we stabilize in march. we got some cool stuff on your shots, andrew. >> i know.

it's so cool. looks like i'm on fire. >> it kind of looks like you're david copperfield, ready to do something fancy. >> a little magic trick. i'm going to disappear. >> cut becky in half or something. >> no, no. >> that's in the next hour. >> that's just hot air, isn't it? >> looks like steam. >> fitting for the show, i think. we have a lot of guests. >> the guests have the hot air. >> all right. have we shown you the futures? i hate when you go walking along and fall in one of those things. >> that sucks. >> that'll ruin your whole day. we're up 121 points on the dow this morning. 15 on the s&p. that's where it's indicated. the nasdaq indicated about. higher. strength in europe. strength in asia as well. the dax is up 143. there's shanghai, up almost 2%.

back above 2700. suddenly we have an interest in what happens in the shanghai stock market because it matters here. the ten-year note saw about 1.3 -- let's look at oil first, which is above 34. >> february is the first time in four months that wti closed higher for the month. >> and probably a good session yesterday to do that. >> yeah, it did. up 3% yesterday. >> it was not oil yesterday. there was a late-day selloff. oil was not the problem. although, i think the asian markets were down yesterday. there's the ten-year we talked about. 1.75, where it's been stuck for a while. the euro about 1.09 or so. i wish we could get that british pound down top parody. mpl got a ways to go. >> probably not going to happen. you were just there. >> it's expensive. >> they pretend everything is a dollar over there.

oh, it's five pounds. it's $5. no, it's $9. but everything is the same. >> yes, i'm realizing that on my credit card statements now. >> it's a scam. they make you think you're spending dollars, but in fact, you're spending 1 1/2 times as much. it's a scam. your buddy really is hot to trot to get me to try to -- >> oh, yeah. warren mentioned it after the show. >> he will underwrite me. i get a million dollars a year for the rest of my life. >> what do you have to give him? >> nothing. >> there's no premiums? >> i have to give him stock advice on ibm. no, i have to win this -- >> what do you have to get? >> i'm conconfused. do i have to get all the sweet 16 right? >> you have to pick every one for the 64 and the 32 bracket. >> you need to get 48 of 48. >> it's easier to win the lottery. he's so funny though. he goes, you might want to take a life insurance policy out on

him so i can afford to get the million dollars a year. >> and he probably wants to sell you that life insurance policy. >> i know there's some kind of angle in this thing for him. he's a big fan, which i love. >> do you have your bracket picked? >> no, you can't yet. selection is coming up. >> okay. then we'll find out. >> this shows you, you know nothing, and you still win every year. >> i still beat you. >> you do. we don't know who's in the tournament yet. >> i've been sick. give me a break. barely made it back. >> all right. >> we got to talk a little british barnging. barclays rolling out results. the new ceo is laying out his strategy for the future of the banking giant after taking the helm in december. kayla joins us now. she has jes staley. she's across the pond this morning. kayla? >> thank you, andrew. our thanks to jes staley, the new ceo at barclays, for having us this morning. >> great to have you here.

>> you said this morning you want to put restructuring behind you once and for all. how sure are you what we got today is the final draft? >> we're very confident of that. we do need to get the restructuring behind us, to focus on the core franchise of barclays. we have a great transatlantic bank that has a consumer business, a corporate business, and investment banking business. the noncore, it started out as 110 billion risk-weighted assets, or 110 billion pounds. we got it down to 47 billion pounds. with some recent businesses that we put into noncore, it's moved back up to 55. but noncore is basically businesses like a retail business in italy or the index business that we sold to bloomberg recently. or our wealth management business in the americas that we have sold. these are businesses that we are getting out of that don't play into the long-term strategic

plan of barclays that we've outlines. we have to get that down because the core business of what we are today in terms of a consumer, court, and investment bank, generates a very strong level of profitability. our return on tangible equity is about 11% in 2015. if we can convince the market we're done with noncore, it's going to take us a year, maybe a little more than a year, but once we get done and there's true visibility to the earnings power of barclays, the stock will recover. >> but what is the true earnings power? there are critics who say what you're selling is where the revenue growth was supposed to come from and what you're keeping in the investment bank is subscale or has become subscale and is so capital intensive. what would you say to that? >> first of all, let's go through our core franchises. our largest franchise, we have a terrific u.k. retail bank. it's very profitable. it's a dominating bank in the u.k., in small business and in corporate and payments.

it has a midteens return on equity. it's a strong franchise. we've been here for over 300 years. that's a very important part of our business. we have a very good credit card business. credit card business in 2015 had a return on tangible equity north of 20%. we are the largest credit card issuer in the u.k. we're the largest credit card issuer in germany. we're the fifth largest co-brand credit card issuer in the u.s. we have more credit card clients in the u.s. now than we do in the u.k. that's a strong franchise. our third franchise is corporate banking. we're lending to midsize corporates and managing cash flow and trade payments. that's a very important part of barclays, also generating a strong double-digit return on equity. the investment bank, as we said this morning, represents today only 25% of the risk capital of barclays. it was 50% two years ago. we've cut that in half. it is not as profitable as we'd like it to be.

it did double its profits last year, but there's a lot more room to go. >> if you have all of those cylinders you can fire on, why is the stock trading at less than half of book value? do investors not trust what's on the books? >> i think it's the size of the noncore assets, those businesses we've gotten out of, and the expense of getting out of them. you sell your italian retail business, and you have all the branches, all the people, all the costs. takes you six, seven, eight months to close that out. it's those expenses people want to see us move beyond. it's getting all the noncore stuff down. there's a real question of how long that will take us. >> it's going to cost your your dividend to do it, at least in the near term. you're having your dividend next year and in 2017. that doesn't go very far to instill confidence in investors. >> clearly cutting the dividend was a very painful decision, as was the decision with respect to africa. cutting that dividend down to three pence was a very difficult

thing to do but necessary to make sure we were unfettered in getting that noncore business down essentially in 2016. then the other issue out there, our conduct fines and litigation expenses. barclays has generated some $30 billion in earnings prefines, prelevies, pretaxes. we we've paid in fines and levies and taxes over $30 billion in the last four years. clearly that's weighing on our investors' minds. we look forward to getting our conduct issues behind us so we can start to see core earnings power of barclays drop down to our shareholders. >> do you feel a true crisis of confidence, though, here in europe? you're in good company with deutsche bank, credit suisse, standard chartered, companies who all have now ceos, have seen their stock prices plummet, their cds widen to crisis levels. i just wonder at what point you think investors will wake up and say, a european bank will not fail. >> so i go back -- if you look

through the short-term issues that we have to deal with in terms of noncore and conduct issues, we have a core bank today, which is very profitable and very sizable. the core earnings per share was about 25 pence in 2015. so we don't have to create a new business or completely restructure our core franchise. it's already there, and it's very profitable. clearly there are winds bufting the european banking industry, which reflect on us, and we have to deal with. but once we get the noncore issues and the conduct issues behind us, we have a very strong and very profitable franchise. but for sure, all the things hitting european banks, whether it's concerns about low interest rates, whether it's concerns about structural changes inside of the european union, these are real issues that we'll have to deal with. but we have great access to the debt marks. we've been issuing -- actually, we're buying some debt back

today. we are incredibly liquid. the bank is in a very strong capital position. we beat the street's estimates in terms of our capital ratio. so we're in fine shape. we've got to get through these issues for our stock price to reflect the true earnings power of barclays. >> well, we're going to continue this conversation. we're going to talk about some of those head winds, about the ecb, about the potential for a brexit. you will be able to see more of our conversation on "squawk on the street" and "squawk alley." for now, back to you guys in new york. >> great. kayla, thank you. >> up next on "squawk box," if you are just waking up, stocks rebounding from yesterday's losses. we'll get you caught up on all of this morning's big movers. you can see right now dow futures up by about 125 points. s&p futures up by 15. the nasdaq up by 39. and later, your guide to super tuesday. the battlegrounds you need to know about before the polls cloez. "squawk box" will be right back.

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♪ no, you're not ♪ yogonna watch it! ♪tch it! ♪ ♪ we can't let you download on the goooooo! ♪ ♪ you'll just have to miss it! ♪ yeah, you'll just have to miss it! ♪ ♪ we can't let you download... uh, no thanks. i have x1 from xfinity so... don't fall for directv. xfinity lets you download your shows from anywhere. i used to like that song. welcome back, everybody. let's get back to the markets. yesterday we spoke to berkshire hathaway ceo warren buffett. here's the advice he gave when it comes to buying stocks. >> american business will do fine over time. if you own a piece of it and don't beat yourself. the only person that can cause

you to get a bad result in stocks is yourself. joinings now is the chief investment strategist at raymond james. jeff, what do you think about what warren staid? >> i think he's absolutely correct. if you look at the growth of book value in warren buffett's stock, berkshire hathaway, it's proven the test of time. >> anybody who has bought the general indexes just over the course of this year has lost money, though. what do you think is going on? do you think there's an end in sight? is there a point in time when stocks not only stabilize but start to rise again in the near future? >> yeah, i think you put in a double bottom in the stock market, the model actually got it right on february 11th at the bottom. we had a 7% rally off of that low. that used up a lot of the market's internal energy. we said the beginning of last week, you were probably going to have a kiss your sister type environment, as the market's internal energy got rebuilt. we would look for that to happen the first week of march. so i think you're starting to take another stab on the upside

here. >> so momentum has changed. you're no longer looking at a market that wants to do nothing but go down. but you're not talking about a rip your face off rally either, right? >> no, the model got that wrong. i had to admit it about two weeks after i made that call in late december. we got the lows right in august, by the way. i will say that credit suisse and a number of bracket firms were hanging out shorts at the 1945 level last week on the belief that the 1812 to 1950 trading rage would extend. if we decisively break above that, the next target area for the s&p becomes 2000 to 2040. >> so you are talking about markets wanting to kind of push higher, just hitting some resistance as they go. >> i think that's exactly right. i do think the upside should be favored here. >> what are you watching? i know you've got the model. i know it's proprietary and you

can't talk about that. what are some of the other signals people can be looking at, saying we can sense that sentiment, that the bearishness is rung out of the markets? what do you keep your eye on? >> i think earnings have continued to come in better than the lower estimates for the past 20-some odd quarters. i agree with warren buffett. i think the american economy is going to be just fine in the long run. i actually think the economy is stronger than the government's official figures suggest. if you dissect the service sector pmi that came out last week, the purchasing manager's index, the inflation rate was over 3%. i think you're going to get a pick up in inflation, which i think the fed wants. i think earnings are going to do just fine. i don't think stocks are all that expensive, except on the cyclical p.e. >> when he looks at northern santa fe, he does have concerns about this year.

he says things have been slower than he would have expected. he expects that trend to continue throughout this year. >> i wouldn't disagree with that, but i think the back half of this year is going to be stronger. i mean, the dow jones transportation average experienced a 31.2% decline from interday high to interday low. but very sneakily over the past four weeks, it has rallied over 1,000 points and actually broken out of previous reaction highs to the upside. so the transports are telling you that the economy is not going into a recession. >> oil prices have actually picked up. we were talking about how february was the first time in four months that you've actually seen a positive month for wti. >> yeah, that's exactly right. i think the r-squared or correlation between crude oil and stocks has been a very short term, only over the past few months, and i have made the argument that if you look at the top ten sovereign wealth funds, they're in basically oil

producing countries who can't keep their revenues high enough because of the price of oil, and they need cash. so the quickest way to get cash is to have your sovereign wealth funds sell stocks in the two most liquid markets in the world, japan and the u.s. >> jeff, if you think the pmi is going to pick up, if you think some of these economic indicators are going to strengthen, that puts the fed potentially back in play. that, in turn, makes people start worrying about the dollar strengthening once again. would you be telling people to buy u.s. only stocks so they have less exposure to the strong dollar? >> i think large cap is actually still cheaper than the small cap complex. i think that the dollar index, not the trade weighted dollar, but the dollar index has peaked and you're going to get a lower dollar going forward. i think the industrials, again, in the back half of this year, are going to be just fine. >> okay. jeff, thanks for joining us today. great talking to you.

>> you bet, becky. >> i was listening. just looking at the guy in new hampshire, the editor of the union leader. >> oh, sure, yeah. >> says, boy were we wrong in endorsing chris christie. i thought it was, yeah, he didn't even come close. maybe you should have endorsed trump because trump was so dominant and is probably going to win today. >> although, the union leader guy told -- >> no, i was kidding. they're not saying, wow, we were stupid for not being able to pick the winner. we were stupid for picking someone who would then say something nice about donald trump. so the establishment guys are coming out of the woodwork. it's not going to stop the train today probably. we'll see. coming up, it's super tuesday. by the end of the day, we should gain some clarity about the presidential race. republican and democratic strategist will join us after the break with predictions, which have been right on for

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welcome back to "squawk box" this morning. joining the smoke behind me. with the music. it's white smoke.

it's a little like the pope. >> this would indicate the pope. with you, it looks like you're broadcasting from some crevasse near hell. >> it's kind of cool. >> i'm going with david copperfield. >> i'll take that. i'm going to make you disappear in a moment. u.s. equity futures -- >> never. >> -- at this four. let's show you the board. dow looks like it would open higher, about 140 points. nasdaq up about 42 prioints. overseas in europe overnight, where kayla has just been interviewing jes staley in london, you're looking at the dax up 1.5%. the ftse 100 in the same territory. let's check out the price of oil. wti crude has moved up. i would say materially we're now at 34.29. >> it's super tuesday. super is a word we don't usually

use for tuesdays. monday you're sort of in shock. >> super thursday maybe. >> in anticipation of friday. tuesday is like the worst day. maybe that's why we do it today. voters in a dozen states will be making their way to the polls. today's final numbers could bring at least a little more clarity to a contentious presidential race, which has just gotten to the point where it's almost -- watching it is like talking about people's small hands and you don't sweat because your pores are filled with tanning solution. joining us to talk about this is kristen anderson, a columnist for "the washington examiner" and republican pollster. ben is a democratic strategist. he's worked in several capacities for president obama. ben, you're not pining for the days of, i guess, lee atwater, and who was hillary's guy? we've seen stuff like this in

the past, but this is like a whole new -- this is like on steroids. this is what happens in a twitter/facebook world? >> well, it might be what happens in a donald trump world. i think you're seeing marco rubio and ted cruz trying to out-trump trump. the question is whether anybody can do the politics of personal destruction better than donald trump can. i think you've seen clinton start to pivot to the general election a little bit. her message seems to be very different, advocating for more love and kindness in the world instead of just trying to take on donald trump's personal qualities and use them against him. we'll see if rubio and cruz are effective tonight, but the polls don't indicate they will be. >> kristen, i kind of understand it because, you know, you look at -- what is that? i don't know if you've ever been subjected to microaggression on a college campus. i'm not sure what that is. it's maybe if you don't have the right kind of appetizer at the

school cafeteria that covers all 180 countries around the world. i'm not sure what microaggression is. you've seen there's no free speech left on any college campuses. we have got an little bit politically correct. as trump says, it's not just him. it's almost a movement, a pushback to all this, isn't it? >> well, there are a lot of voters out there who like donald trump ze spite many of the things he says that would be disqualifying to any other political candidate. because there's so much frustration. you've had so many months consecutively where voters have said over and over that they think the country's on the wrong track. so as a result, they're willing to say, i'm going to vote for this guy who does everything that you're not supposed to do in politics because i'm just that hungry for somebody who's different. that's given donald trump the ability to continually defy expectations time and time and time again. and it's why we're now on the day of super tuesday and he looks very, very, very likely to be the republican nominee. >> so ben, then you have this

nice young man with a great family, march rubio. very earnest for the first six months for the campaign. maybe too much on message, even robotic at times. then he doesn't get enough traction, so suddenly he turns into sort of like a junior version of donald trump. will that help him? did he have to do that to try to get some traction? don't you sort of look at that and say, this isn't who you are, why are you trying it? >> i think you're right. look, the quality that matters most in a presidential campaign is authenticity. voters spent a year evaluating you before a primary in very close quarters. >> hence hillary clinton's success, ben. authenticity? >> well, i think, look, look at the 2008 primary. when she became in close quarters a very authentic candidate in new hampshire who

exposed her vulnerabilities, she defeated obama and she became a very, very difficult primary challenger when she tossed out that original message in the 2008 campaign. one of her difficulties has been reintroducing herself and breaking down some of the perceptions that have been built up over the years. i think you started to see her message breakthrough in this campaign in an authentic way. for marco rubio, you can't say you're a totally different candidate this week than you were for the past year. that's a vulnerability for him. >> kristen, we were talking off camera -- and polls are polls, for whatever they're worth. but rubio, cruz, and kasich all in a general election poll ahead of hillary clinton. this is before we figure out what justice is going to do. but this is before any of that. i think trump's down by four points. but i mean, those are staggering

numbers for someone that's been around for so long that we know so well. this election is just upsidedown in terms of what to expect. >> yeah, i disagree with ben a little bit that if this is an election about authenticity that benefits hillary clinton. both hillary clinton and donald trump are the candidates in the field who have the worst favorable-unfavorable rating among voters nationwide when you look at poll after poll. but they will, nonetheless, likely be the nominees for their respective parties. these other candidates in the republican field are less known than donald trump, but they also have less of a core constituency than trump seems to have. so i think the real question is moving forward into the general, what's the democratic playbook going to be against donald trump? you're beginning to see marco rubio deploy some of those attacks mixed in with the stuff about his face and does he have small hands. the real questions there are does donald trump beat up on the little guy? he claims to be an advocate for the little guy, but is he actually the sort of person who through trump university, his business record, has not been an

advocate for the little guy. that undercuts the core of trump's message, but it may be too little, too late coming from his republican contenders in the field just before super tuesday. >> ben, we've seen over the last seven years, i don't feel like we all love each other quite as much as we used to in this country. a lot of political sort of fragmentation. what's the country going to be like if fully 45% to 48% of the electorate hates and despises and holds in contempt the new president? because depending on who wins, i've never seen such vile from the left for an individual. you know how the right feels about hillary clinton. that's what we're looking at then, a fragmented country where half of the country wants to move to france. >> well, there's two ways to run a campaign against donald trump. one is to be on the same level as him and run a slash and burn campaign, but -- >> what question are you

answering there, ben? i have no idea. i love your spin. i do. you're on message. but my question is to you, what kind of country is this going to be like when half the population can't even imagine the opponent becoming president? what's that going to do for the united states? >> well, i think what i was getting to is i think both candidates have the obligation to run the sort of campaign that doesn't result in that outcome. and i think -- >> but both candidates are very well known. they already have very high negatives. >> the country is divided. but there's an obligation here to show that you can be president for all americans. winning is not enough. you've got to also demonstrate that, and that's going to be an obligation of both parties and both nominees. >> when you say that -- when i say winning, i say winning! from now on, just use it in the charlie sheen -- because it's sort of become -- right?

don't we say winning? >> that's the way it's going to go. >> winning! >> just for 50%. >> do you have tiger blood? >> i have tiger blood, and i have smoke coming out of my head. >> kristen and ben, we can't conduct an interview that's sillier than the actual campaign. so i don't even worry about that anymore. thank you for your time this morning. we appreciate it. >> when we come back, today's top stories. we've got some buzz stories, including bigger credit card cash back rewards. and a virtual reality prize in every happy meal. right now as we head to a break, a quick check of what's happening in european markets. things have been indicating higher, trading this morning. the dax actually is up by almost 1.75%. stick around. "squawk box" will be right back.

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welcome back to "squawk box". it's time now for the executive edge. a couple stories to tell you about. goldman sachs financial adviser has been put on administrative leave after he was names in a "new york times" article as being the old goldman sachs employee to tribute to donald trump's presidential campaign. now, the employee has also been selling hats with the trump-esque phrase "make christianity great again." goldman sachs employees are allowed to pursue outside business ventures, but this particular employee had not received permission for the hats. >> he wasn't put on leave yet.

>> that story was written completely wrong. >> no, no. every headline has been effectively that someone at goldman sachs -- it's because he did this other thing with the hats. >> people that write headlines, especially for certain places, don't care where the headline is accurate. there's a story that they want to put out there. either -- and in this case, it was because the guy's got a side business going on. have i told you guys about -- i've got some stuff i'm selling online, yeah. no, i don't. you can't do stuff like that, can you? a whole website. >> i mean, i am. so i don't know. >> that's right. you do. but you cleared all that. >> yes. cleared. some of the religious websites haven't been cleared. >> the satanic ones with smoke. >> it stopped. >> they're done.

>> it's coming from over here now. >> what was happening though? careful! ♪ >> he's going to go down there in the manhole. >> it's like a horror movie. men >> there's always monsters. >> yes, slimy ones. we should also tell you about mcdonald's introducing happy meals that actually double as a virtual reality headset. the boxes, which are called happy goggles, can be folded to hold a smartphone and be paired with a virtual reality skiing game. the high-tech happy meals will be available for a limited time this month but only in sweden. >> those are pretty cool. >> interesting. >> coming up, super cars are getting faster and a lot more expensive. next, we're going to show you some new offerings from the companies bugati and lamborghini. which ones will set you back seven figures. the one and only robert frank is in the house to tell us all about it. we're back in a minute.

ouder. 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.

the geneva auto show kicked off this morning, showcasing the most expensive new luxury rides. and have seen a couple of them, robert frank. i think they're both lamborghinis, right? what's a chyron. >> i'll tell you how to pronounce that in a second. the super car wars have reached

a whole new level. in geneva this morning, bugatti unveiled the new chew chyron. the most expensive and fastest production car ever built. 1,500 horsepower, 0 to 60 in 2.4 seconds. its computer limits you to 260 miles per hour, but it goes a lot faster. the base sticker price, starting price, $2.6 million, and they've already sold more than 150 for a total production run of 500. now, lambo launched the 770-horsepower sentanario. the company's 100th birthday. it's only going to build 40, priced at $2.5 million. but sorry, it's already sold out. and rolls royce launched the new black badge brand. it's blacking out its cars, including its famous hood ornament. the question is whether lurks

c car booms can continue. >> many people are putting their assets, their rubels now in real assets. our costs and also coming to the question regarding asia, asia is really good for us in the moment. japan is good, korea is good. many other asian markets are good. all in all, i wouldn't say that the world is in doom and gloom. i'm quietly confident for a good year in 2016. >> last year, sales of cars priced at 150,000 or more doubled to over 4,800. but china is the big question. china used to be the number two market for rolls royce. now it's fallen to number three or four. the middle east is now number two. the u.s., by far, the biggest. for u.s. customers, european luxury cars are now cheaper. because of the -- >> pass new york with billionaires or something, or beijing did. and no one in the middle east has money -- >> because of the oil. >> but it makes sense, what he said with rubles. if you're looking at an economy that's crumbling. >> who owns rolls royce now? >> rolls royce is owned by bmw.

>> that's why it's -- >> and volkswagen owns bugatti. so the germans have a lot of the supercar companies. and volkswagen also owns barm go lamborghini. >> what's the point of having a car that goes fast but the computer stops it. >> 260 is the legal limit, but it can go over 280 if you go on a special track with bugatti. but they have to turn it off for you. >> did you see that guy put a booster on the car and he hit it and it didn't realize -- there was something that he didn't calculate would be in your past. he gets there and he was dead. you don't need to goover 280, do you? >> i mean, 1,500 horsepower, i think, has gotten into the ridiculous. there's no need. the amount of accidents -- first of all, people won't really drive these cars. >> it's only a second faster, 0 to 66. there's things that go 3.4. you really need 2.4? >> when autonomous cars come,

what happens to these guys? >> there'll always be car aficionados and collectors that want these cars. >> they're going to go to the track on weekends? >> turn it on 260 and drive around. >> see that ridiculous reck out in california with google -- >> yes. >> google went 2 miles an hour into a bus or truck going 50 miles an hour. >> that's not even a wreck. >> 2 miles an hour? >> that's like sad. >> we apologize! even watching that would be like, come on. anyway, that's like -- >> robert frank. >> thank you, guys. >> thank. when we return, your guide to super tuesday. a dozen states going to the polls today. john harwood and larry kudlow are here to tell us how decisive today's primaries could be. plus, we have early data out from google on which candidates are being searched the most in the primary states. "squawk box" will be right back. by debating our research to find the best investments. by looking at global and local insights to benefit from different points of view.

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super tuesday set to test candidates. the coast-to-coast battle for delegates could make or break campaigns and presidential dreams. we will break down what's at stake for the country and your money. >> apple's privacy stance getting stronger. a new york judge ruling in favor of the tech giant. will the decision influence other courts and lawmakers? we have the debate, straight ahead. bill ackman standing firm behind valiant. the activist investor says the issues that the company will all get sorted out soon. still, the stock getting hammered with the news of an s.e.c. probe. the latest on the drugmaker drama, coming up. 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," everyone. this is cnbc, first in business worldwide. i'm becky quick along with joe kernan and andrew ross sorkin. the futures this morning are indicating a higher open. right now the dow futures are up by triple digits. a gain of 111 points. check out oil prices. wti, up again this morning. yesterday, it was a gain of about 3%. this morning, you see another 42-cent gain to 34.17. the ten-year note at this point is yielding right around 1.743%. and gold prices, take a quick look. you'll see that right now, gold's up about $12.50. $1,246.90 an ounce. and a legal victory for apple. a judge ruling late yesterday that the justice department can't force the tech giant to provide the fbi with access to a locked iphone data. that's in a routine case that was taking place in brooklyn. it was a drug case. apple's legal chief and fbi

director, james comey, are both set to testify before congress later this afternoon. should say, by the way, we didn't talk about this. it's a magistrate judge, so it could be appealed. it's a little bit different than some other cases. so it's not a straight appellate -- >> what would it have to be appealed to? >> to a district court. >> because we're going to end up at fo4-4, right? >> this would not get to the supreme court for another year. >> this one, though, a simple drug case? you can unlock the entire apple iphone backdoor. >> this is different than the san bernardino case. >> are you okay with not opening it for some routine drug case, at least? >> this is a different case. and they're not being asked to create code. so i'm going to stick with -- >> okay, go ahead, stick with your flawed opinion. >> my flawed opinion. economic data on deck. the ism manufacturing index comes out at 10:00 a.m. eastern

time. january construction spend is also out at 10:00 a.m. and we'll get a look at consumer demand with auto sales. and the new york fed president making some news. bill dudley sounding cautious about raising rates in the near future, speaking in china, he said the drop in commodity prices and entire financial conditions might lead to slower growth and weaker inflation. dudley saying the balance of risks may be starting to tilt slightly to the downside, but he's only slightly marked down his growth forecast to about 2%. >> no fed rate hikes, as far as the eye can see. >> yeah. >> you buy that? >> i do buy that. >> that's the right thing to do. >> we should welcome you. larry kudlow is here. we'll do that formally in a moment. super tuesday has arrived. it is tuesday and it's super. with delegates in 12 states up for grabs. john harwood joins us now and he's got a breakdown of what's at stake for the candidates. john? >> this is a day when the race goes national. it's the first day with multiple contests on a single day.

and that advantages candidates who are national in their reach. you look at hillary clinton and donald trump. they both have big national leads. take a look at the map. mostly southern states. that's why they call this the s.e.c. primary and the candidates have been hopscot hopscotching all of those -- all that southern territory. now, take a look at who is advantaged in those states. when you look at preelection polling, there isn't great polling in a lot of states, but donald trump leads most places. big leads, for example, in alabama, in oklahoma. he leads in virginia. he leads in the northeast, as well, in massachusetts. hillary clinton, same deal. she leads almost everywhere. now you look to where the race goes from here. that's super tuesday, march 15th, when the race switches on the republican side, to a winner take all contest. that's when, if donald trump's trajectory is not interrupted today, he could really lock in the support he needs to become

the republican nominee. states like ohio, florida, where marco rubio would have to win in florida. john kasich would have to win in ohio, just as today, ted cruz has got to win in texas to stay alive in this race. the danger for republicans is that the effort to stop trump has now taken on an intensity, a moral character issue, that is potentially crippling for donald trump, if he's the republican nominee. people like meg whitman, christie whitman, mitt romney, harshly condemning him as a demagogue, someone who's dishonest and appealing to racism. that's a challenge for the republican party. whether they can stop trump or not, we don't know, but trump has a problem going forward as a result of this anti-trump movement, guys. >> you know, almost the fatigue that we have with this server. i mean, you hear it enough, and finally it becomes like a cat that sort of doesn't jump anymore when it hears a noise. if you hear this about trump with his own party, then during the general election, i'm not

sure that it hasn't been already tested and inoculated. >> that's possible. but you are starting to hear, with an intensity that we haven't seen before, people like ben sasse, the senator from nebraska, saying -- >> since day one, the establishment has been that. it's gotten more -- >> no, no. this is different. >> well, because all of a sudden, it's actually happening. >> that's right. >> of course they're getting more and more -- >> you have more people saying -- >> than the entire way. >> right. but the difference is, when you have republicans saying, i won't support donald trump if he's the nominee, which most have been saying, yesterday you had mel martinez, former national chairman of the republican party, saying, i can not support donald trump. ben sasse, the senator from nebraska. >> he's been a senator since 2014. you've got guys like sessions, the soul of the conservative movement in the republican party, that suddenly gave him -- almost validated the campaign. same with chris christie. >> he's got support and he's got support with voters and he's got

chris christie. but there's been tremendous blowback to that. >> i think john is -- i'm sorry. i'm larry kudlow. i'm with cnbc. delighted to be here. >> who are you? >> larry kudlow. >> go ahead. >> chris christie's endorsement was very important. and i agree with joe, sessions very important, also. two different wings of the party. i just say, not personal, i really like mitt romney, he's a fine human being, but politically he's a eunuch, okay? let's get serious about this. second, karl rove, a friend of mine. politically, karl's a eunuch. he hasn't won anything in so long, since w. these guys are trying to spend $100 million, $200 million to file bullets at donald trump. why don't they fire them at hillary clinton who's going to be the opponent come the election and make that case? they have no influence in these super tuesday primaries and the florida, ohio -- none, zero.

>> you're certainly right, that they're not going to affect the trajectory of these primaries. however, the reason that people like meg whitman, mitt romney, christie are speaking out, they fear long-term damage to the republican party that's worse than the damage that's already been suffered. >> but john, they are, with all due respect, christie todd whitman, god knows i helped elect her years ago, this is the far left wing of the republican party. they don't have any influence left at all. and i'll say this. if trump gets in -- i don't want to say he will, but if he gets it, he's a pretty seclude businessman. he knows how to make a deal, sit around the table and talk to people. and i'm going to leave it at that. to me, the biggest issue today is marco rubio's demise. because you've got to have some place, a w., in order to hang in there. he has no ws. >> a win in at least one state. >> something. even if it's the alaska caucus. he'll fly up there and proclaim

great victory. i have no idea. i'm just saying, cruz will win some states, as john suggested. cruz will win texas, i reckon. that's what all the polls say. he's got a shot at arkansas. he's got a shot at oklahoma. so we'll see. >> minnesota's another one where there's a caucus. it's close at the top, rubio and cruz. >> i completely agree. >> but a lot of this polling is not great. >> it's terrible, i agree. >> you have one poll that comes from a university three days before the election. don't know how accurate that's going to be. >> so you're going to give cruz texas, all right? until the election. >> well, there was a poll yesterday, arg now, they have a mixed track record, but they showed donald trump just one point behind ted cruz in texas. i do not think it is beyond the pail that donald trump could win texas today. if that happens -- >> it's over. >> that would extinguish cruz and leave rubio and kasich with the challenge of saying, i can win my home state against trump, therefore i should stay alive. that's their argument right now.

>> i think, if you're right -- that's interesting speculation. if trump beats cruz in texas, that's it. i'm going to say it, that's it. because to me, it's a two-man race right now. it's a two-man race. it's trump and cruz. >> even if he loses -- if trump wins oklahoma and arkansas, that almost makes it -- >> almost, you're right. you're exactly right. marco rubio has just got to produce -- >> trump's double digits ahead in oklahoma, with the new poll yesterday. >> it's crazy. >> he's 20 points ahead in florida. >> but you're underselling the risk that donald trump could split apart the republican party. >> i don't buy it, john. i heard you, read about it in "the new york times" and so forth. >> "wall street journal". >> i don't buy it. i think this is a democratic process, small "d," it's well defined, you've got your caucuses, your primaries, as you mentioned, it will be winner take all after this round. if he wins the delegates, he wins.

that's it. and they will -- that's what christie is so important. because he is a card-carrying member of the establishment. and by the way, on that point, i don't know if you've been reading one of my favorite newspapers, andrew. that's the "new york post". >> it's a pretty newspaper. >> i figured you would. >> i do. >> that's good. you're making good progress on that. >> thank you, sir. >> they are writing important articles that trump can carry new york state. the famous republican chairman in new york, william powers, who engineered rudy giuliani and george pataki in the '90s, he did an interview with fred decker and said, we already should be endorsing trump, because he's in new york state. so that's terribly, terribly important. one last point. let's get out of the horse race for a minute. let me tell you my problems with this whole story. because of this extraordinary cat fighting that is going on, for several weeks, okay, and getting worse, if you ask me, the gop has completely lost its

message. and that troubles me enormously. >> there's an op-ed piece that says that too. >> it's hurting. they can get it back, but they've lost ground here. the whole point of this -- >> larry, that makes the point about the challenge to the republican party. if you talk about, what is the gop me think, what is donald trump's message, you talk to a lot of republicans, and they say, his message is trade war. is that the republican message? >> well, no. i think the deeper message is, trump has tapped into the vein of beleaguered discontent of cranky and angry lower and lower-middle class voters, many of whom are democrats. 2% -- i wrote a piece on this for cnbc. a 2% growth rate for 15 years has produced no wage gains at all for the great american middle class. and they are in full revolt. and there are a lot of democrats, a lot of mindies, they're coming over to vote for trump. there was a great story, massachusetts, they're de-registering as democrats and that's going to allow them to

vote for trump. trump will win the massachusetts primary, i think. so my point is, they're off that message. >> can i ask you a question? >> whatever you think of the policies, all right, i happen to be a free trader, although i do like trump's tax cut plan, but whatever you think of those policies, the idea of resurrecting growth skpreand protecting the middle class, we've lost that message. >> but do you think trump is going to be able to do that? >> yes. >> completely serious. i understand the that there's a huge disaffected community that is upset and that's why they're voting for him. but i'm asking you whether you think he's capable of delivering? >> yes. >> i want to change it -- >> just one more point on this. >> okay. >> donald is campaigning in large part, sort of a campaign within a campaign, to change the republican party. i asked him directly in my interview up in manchester, new hampshire, a couple of weeks ago. he's out there campaigning against big pharmaa and big

oil -- >> corporate bloodsuckers, he says. >> he's got a point. he hates the crony capitalism and wants to put an end to it. i think that's a winning message. i think the establishment of the chamber and commerce and so forth do not like it one bit. that is a source of friction internally. and andrea, i've got to tell you there. i think trump is right on that. i think the republican party is due for an overhaul. >> let's shift to the democrats. all along, you've told me that you sort of thought that eventually, hillary clinton had a pretty good shot at succeeding -- >> yes. >> all right. somehow bernie sanders became a viable candidate, which to me speaks volumes about how vulnerable she is. even after all of this, and after all the fighting at the republicans, she loses in polls, still, to rubio, kasich, and even cruz. and trump's only behind three or four points. >> mm-hmm. >> that's staggering to me.

>> she's got big vul nshnerabi s vulnerabilities. >> once someone becomes a presumptive nominee, three or four points down, i wouldn't use ink to write those numbers down. >> of course not. >> that's staggering to me, that after all of this, the republicans shooting themselves in the foot, and all the stuff we talk about, she's a very, very flawed and vulnerable candidate at this point. it's staggering to me. >> she has a lot of weaknesses. >> and this is before an indictment. if it comes from justice. or before something even -- did you watch loretta lynch last night for a half hour on one of the other networks? >> i didn't. >> i watched it. i didn't find out anything. i found a lot about the nuances of the apple case. she was in the weeds with that. not one opening, forthcoming statement about what's going on. >> let me run through quickly what her vulnerabilities are, it's hard for a party to win a third term in the row. the same disaffection larry's talking about, middle class

people feeling like they're not getting ahead. that goes on democrats and republicans. and she's got the scar tissue from a lot of clinton years, clinton scandals, trust, all that stuff. that's a heavy burden for her to carry. but -- >> trump can get a bump -- >> there's an advantage for what's going on on the republican side. >> it becomes clear he's the presumptive nominee, he gets a vote. >> you were much more right about hillary's significant. i looked at the sanders things for several weeks and i thought it might really take off. i don't think it has. and i think you were ahead of the game on that. look, trump versus hillary, that could be the most fun we've ever had. >> except that half of the country -- >> the most fun we've ever had! >> half the country's going to hate the new president. the outcome is not going to make -- >> look, they didn't much like abe lincoln, too. cme group can help you navigate risks and capture opportunities.

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welcome back to "squawk box." the futures right now indicated up 124 points. i don't -- that's not a trump rally, because he's going to win today. i think you're wrong about that. i think the market is probably up on other things. >> because hillary's going to win? that why? >> maybe that's why. >> because we're going to defeat bernie sanders. maybe that's why. >> could be. when we come back, a rough first day back on the job for valeant ceo, michael pearson.

we'll break down the latest revelations and find out why bill ackman is sticking to his guns.

shares of valeant plunging more than 18% after the company

revealed it is under investigation by the s.e.c. the news coming out just as ceo michael pearson returns from medical leave and cancels the company's fourth quarter earnings report. some high-profile investors taking a hit. persian square lost $280 million in the drop, john paulson's firm lost $173 million. value act, nearly $200 million. and this morning, rbc jumping on the bandwagon and downgrading the stock from outperform to sector perform and lowering its price target to 84 from 194. so, that's really unbelievable, that we're even mentioning that, i guess. they were still at 194. and they've decided there's something there. they're going to lower the price target. so factor that into your thinking on what to do with the stock. who was that? i don't even remember which firm that was. >> rbc. >> rbc. so there's something -- they're out in front of this, meg. and something that -- something concerns them, with the company, to lower the price target.

add that into your quiver. when you're deciding what to do with the stock. rbc has changed. they've no longer outperformed. >> to watch these analysts deal with what happened at valeant, they were such supporters of it. and you see them coming to terms with the fact that you just can't get a grasp on how to value this company. yesterday was michael pearson's first day back. everybody thought when this day came, it was going to be a great time of sort of knowing what was coming for the company, fewer shoes to drop, and the shoes kept dropping yesterday. from the news that they were splitting the ceo and chairman roles, people thought that was good in terms of governance. but withdrawing the guidance, postponing their earnings call. later in the day, as analysts were clamoring to talk with mike pearson, scheduling an impromptu analyst call, and withdrawing that when the media caught wind of it, when folks began to complain about regular fd, moody's coming out saying their debt is under review for a downgrade. they have $31 billion in debt.

and then, of course, this new s.e.c. investigation into what's going on. a lot of folks think that's probably around fill-a-door. they also came out last night and said they're not going to be able to file their 10k in the 15-day period they had for the delay, because they're continuing that fill-a-door investigation. until they wrap that up, they can't file their 10k. so folks are waiting for some certainty to come. ackman coming out in support saying now that pearson's back, we're going to get that certainty. and that's what everybody's waiting for. >> is he right? is that how the market's reading it, that pearson's back and there'll be some action as a result? >> i think that was a more optimistic view than the 18% drop yesterday implied most people were thinking. folks are too worried about what's going to come out here to feel they have a good grasp and clarity on what's going on with the financials. >> so, what canceled the fourth quarter earnings report? they're delaying the release? >> that's supposed to be yesterday. they said in the near-term, but they haven't given a date for when they'll give it.

>> you can't really cancel it. like, okay, we're skipping that fourth quarter report. we're going to go -- we're just going toot first quarter. >> just focus on -- >> yeah. yeah. >> it's already passed, anyway. >> thank you, meg. >> appreciate it. when we come back, mr. buffet remaining bullish on stocks despite a rough first two months to the year. we'll see whether steven parker agrees with mr. buffet. and apple winning a ruling in new york over an iphone hacking order. we'll tell you what that decision means, whether it will influence other cases where law enforcement officials are telling apple to unlock phones. we will debate that issue, as we need a break, take a look at u.s. equity futures. we are in the green with the dow up, looking like it will open up about 130 points higher. back in a moment. good.how was your commute? yours? good. xerox real time analytics make transit systems run more smoothly...

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welcome back, everybody. among the stories front and center, the nation's automakers are expecting improved sales

when they report february numbers this morning. analysts at edmond's.com predict that the biggest increase to come from ford. they also expect sales about 17% higher from a year ago there. investors will get a look at two economic reports today, during the trading session. the ism manufacturing index is expected to edge higher from last month. and the government is expected to report a half a percent increase in construction spending for january. also, some potential deal news this morning. new york stock exchange owner ice confirms that it is considering a bid for the london stock exchange. ice says that to approach has been made so far and no decision has been made whether to pursue an offer, but you can see the lse is up by over 8% this morning. >> a little bit of good news this morning. actually, maybe a lot of good news for david einhorn and his investors. einhorn's greenlight capital one of the first hedge funds to post positive returns after what was a pretty rough year last year.

greenlight gained 3.3. bets on retailers macy's and dillarded helped einhorn so far this year. and l.a. clippers owner steve ballmer showing off his hang time. check out this video from the halftime at a clippers' game against the nets. the 69-year-old billionaire wowing the crowd at l.a.'s staplesner with a devastating two-handed dunk, but there was a lowered rim and the assistant -- >> i would have hung on the rim a little bit. maybe tried to break the backboard. >> he's lucky that didn't happen, because -- >> yeah, he does own it. >> but it just shows you, the rim was lowered and he had to have a thing to jump. and those guys do that, they -- effortless, the real players. it was part of the halftime announcement of the new clipperses mascot, chuck the condor. here he comes in.

>> he's flying in. >> actually flies. >> wow. >> that's pretty good. good audio. despite systemic risks from cheap oil, the china slowdown and central bank policies, warren buffett remains bullish on stocks. check it out. >> we're almost always a buyer of stocks and we're a more aggressive buyer when they're going down. i feel much better when they're going down. but it's hard to think of have many months when we haven't been a net buyer of stocks. >> joining us now is steven parker, from jpmorgan private bank. earlier, we characterized the year as january as frightening and february started out like more of the same, but it stabilized late in the last couple of weeks and we had a couple of good weeks. have we made a bottom and are we now ready for a sustained advance toward the end of the year or not? >> i think there's still going to be a little bit of choppiness going forward, but i think what mr. buffet said is correct.

you have to think about these opportunities when you get these pullbacks in markets. >> global stocks at one point in february had declared 20%. they were in a bear market. history tells you that's when they want to be buying. and the success rate with a longer term investment horizon is really high. what you have to think about is that time horizon. and if you can do that and we don't go into recession, which we don't think we're headed towards, that's going to turn out to be a really good buying opportunity. >> okay, so what we worried about at the end of last year, are there new worries? will the election ever become paramount in deciding what to do? it was oil, it was china, it was the fed. those were the three big things, i guess. are those still the most important things? >> i think those are certainly where markets are focusing. but one of the interesting things, if you look at markets, even with oil prices down more than 10% this year, energy stocks are no longer underperforming. even with the concerns around china and everything going on in

global growth, emerging market stocks are no longer underperforming. marketing maybe telling you, we're starting to get closer to the point when you're bottoming. it's not to say some of that may be repositioning, so maybe people are just moving back into a normal level of positioning there, but markets tend to start discounting better times ahead, well in advance. >> when do we see better times in terms of profits starting to go up year over year? >> that's the big question, because i think a reduction of the fears about recession could get us back to where we started the year. but i think that in the u.s. we're expecting low single-digit growth this year. we're further along in the cycle. we're starting to look outside of the u.s., in places like europe and japan, where i think the potential for earnings upside, or the potential for great profit margins are actually higher, that's why you want to look for the growth outside of the u.s. >> okay, but if the rest of the world is better, we'll start doing better as well.

and if we start -- if we're at full employment, got a number on friday, you can see we'll start to see wage gains. is that good or bad? >> i think long-term it's a good thing. it's going to pressure margins a little bit, but at some point we feed to get out of this low-growth cycle. and the only way to do that is to get the broader consumer population to start spending. if you look at consumption growth since 2009, all of the growth that we've seen in the u.s. in consumption has come from the top 10% of households. we feneed the other 90% of the country to start spending and the way you do that is by better labor markets, better gas prices and more confidence around things like the housing market. >> do you worry that the fed steps back in at this point? right now no one's expecting the fed to raise rates anytime soon. >> our view is that the next fed move is going to be a hike. i don't think it's going to be anytime soon, but if you look at a lot of the economic data, even some of the recent inflation data, it's starting to tick up. and i think that if markets were up 5 or 10% this year as opposed to down 5 to 10%, and you had the same complicate fact

pattern, people would be very comfortable with the idea of the fed raising. >> it really is the weakness in the markets that's the deciding factor? >> i think that's what people are looking at. and we had the 25 basis point hike from the fed. and everyone's talking about the tighter financial kins. but that 25 basis points was really not that big. spreads are widening out in credit markets. so if you get a better economic outlook, things stabilize a little bit, the dollar and oil stabili stabilize, i think you can get some of those financial conditions beginning to come in a little bit without the fed having to cut rates. >> so would you ever factor in the election or when do you start paying attention to that? >> i think you have to pay attention. markets hate uncertainty. and you know, a number of the candidates involved in the election this year are wild cards that i don't think markets expected to be involved for so long. there's not a lot of clarity at this point around what the policy is going to be. so, you know, from an investor perspective, trying to anticipate what candidate x or y

is going to do is really tough but something you have to pay attention to. >> what would you tell clients? okay, what would you tell them about hillary clinton? good or bad for the stock market and for business? >> i think, palace notwithstanding, i think she's a more known entity, so i think markets would react positively to her being the candidate. i think there's a longer track record and better understanding from what may come from that. so i think that would be perceived as a positive. >> someone that would continue barack obama's policies would be construed as a positive, just because you know what she is, the devil you know is better the one you don't? >> i think markets hate uncertainty more than they are concerned about the potential policies. and i'm not giving my own political beliefs, but marks have done okay over the last five or six years. so a continuation of those policies. at the end of the day. i think it's a lot more about profits and not about policy. and what we need to see is we need to see the corporate sector in the u.s. be able to get back to focusing on profits, focusing

on growth, and i think that's what's going to get us higher in markets. >> the markets started from 666 on the s&p. the world was ending and the commercial paper markets were freezing. the economy itself has been the worst recovery we've seen in the past in the 20th and 21st century. >> and when you look at investor sentiment, retail investor surveys, the cash positions, that fund managers are holding right now, in a lot of cases, they're actually more pessimistic over the last couple of weeks than they were in 2008. so the world is a much better place today than it was in 2008. >> there was europe for eight years, too. >> it is better, but i don't know whether, you know, i don't think the average person on the street, we wouldn't be at 70% wrong direction if it was a full economy that was benefiting instead of just the markets from the fed. >> well, that's why the question about wages is so important. at a certain point, you need the

rest of that economy to feel it. and we talked about -- becky touched on auto sales. you know, auto sales, that's a big purchase. consumers aren't going to go out and buy a car if they don't feel really good about not just the near-term prospects, but the longer term prospects. >> people with assets have done great. that's one of the reasons why we're in this very surreal moment in time, right? >> that's right. >> because people that have had money to start with, obviously, have added gains. steven, thank you. gave me the wrong answer on the election. anyway, thank you. anyway, denying apple's request to unlock an iphone. could the ruling influence other courts?

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and a better future. for all of us. because making something in america means so much, to so many. weathertech. proudly made in america. a legal victory for apple ahead of another hearing on capitol hill. let's get to eamon javers in washington. what have we got? >> good morning, joe. you've got to describe this as a big win here last night for apple. a u.s. magistrate judge handing down a ruling, deeply skeptical here of the government's assertion that the 1789 all ritz act applies in the government's effort to force apple to unlock the iphone of a suspected drug dealer if queens, new york. the judge also arguing here that

congress is the best place to adjudicate all of these disputes over privacy and information gathering by the u.s. government. here's some of what the judge said in his decision that came down last night. he said, the assistance the government seeks here, bypassing a security measure that apple affirmatively markets to its customers is not something that apple would normally do in the conduct of its own business and is, at least now, plainly offensive to it. that's u.s. magistrate judge, james orenstein. apple pointing out this bar was lower than the bar in the san bernardino case that we've all been paying so much attention to, because in that case, the government would require apple to write specific software. the government for its part, joe, said it was disappointed in the decision and you can expect they will appeal that decision as well. now, later on today, we should hear more about all of this from the fbi director james comey and from apple's general council, bruce sewell, who will be up on

capitol hill for a hearing, looking into encryption and this entire debate about privacy and iphones and whether the government can force the company to unlock those phones if the company doesn't want to, guys. >> thank you for that. we should tell you that yesterday, if you missed it, right here on "squawk box," warren buffett weighed in on the debate over privacy versus security. >> privacy has its limits. and the national security has its limits in the other direction. you can't call everything national security. >> here to talk about this very subject, bradley tusks, a strategic counselor to start-up companies navigating the regulatory environment. where do you land on this? >> you know, i think buffet's right. the idea there are absolutes on either side doesn't make a lot of sense. think about your daily life. you use ez-pass to go through tolls the because it's worth the convenience to you, yet you're giving away some data. on the flip side, you go through a metal detector at the airport,

because you care about security so you go through the inconvenience. >> so what's the middle ground look like? >> a judge yesterday said that apple can't be forced to do something new to help on a drug case. that makes sense. a lot of drug cases and the merit -- >> by the way, that's a magistrate judge who can be appealed in a district court. >> on the flip side, terrorism, and i think everyone walking on the street behind us who was here during 9/11 said you can't compare your average drug dealer being prosecuted to a case of real, serious terrorism. and so -- >> so tim cook is not making any distinctions. >> i understand that, but i think that's a mistake. i think it's a mistake for a few reasons. one, i don't think it really feels real and logical to most people, most voters, most consumers. >> talk to him. >> i don't think it does. >> what does? >> i don't think the idea that if you're tim cook and you're saying -- >> you've got someone on your side -- >> looks like you -- >> you're good, you're good. usually not. i just, you know, if we attack some of these things right at the source, i think it makes more sense than at the very last

way to keep something from happening is to sacrifice everyone's privacy for a few people that are abusing it. and in a world where freedom is paramount, and that's what we have in this country, and you've bombed the trucks that are transporting oil and getting money for isis to operate, you go in and what do what you need to do to cut -- >> i think that gates tying it to a bank having to be able to turn over -- >> what if -- what if, eventually, there is no way to get -- let's say that the data that is in -- can be accessed through the back door, what if that data didn't exist at all, like wicker. it's not stored at all. >> would you write legislation that disallows a company to design a system where there's no records of what's been done. >> why do you have to take it that far? there's nothing mutually exclusive about saying, let's attack terrorism at its source. sometimes that makes a lot of sense, sometimes not. >> but what if designing the

backdoor, in apple's contention, and people argue about if it's true or not, what if it eventually allows you to get into the back door of every single iphone out there and ruins their business model. >> if you take that to logical conclusion, you should never develop anything or open up anything, because there's always some sort of risk. and apple has no problem using my data every day to sell me more stuff. i had to download that terrible u2 album just because -- >> you're not getting paid for all your -- >> the issue is not so much -- >> this is not a clear-cut case. and if you want me to bring in ten people to take my side, you don't -- >> no, no. the issue, at least, from my standpoint is not so much about wicker. if the data doesn't exist, it doesn't exist. but in every instance in the analog world where information exists, whether it's juvenile records, doctor records, if there is a legal warrant, we make the most sensitive information available -- >> all the same stuff -- >> let me -- you're going to force a company to design a

product that it doesn't currently make? that's another thing that people talk about. you're forcing apple to write software and design a product that it wouldn't do on its own, which is also another argument. >> there's another piece here that i think is worth thinking about. so if you're apple or the company supporting apple, google, facebook, twitter, you're creating new products and sort of a frictionless environment. they're not inherently regulated apps, something like this. look at start-ups, take uber and air b&b, everyone that's in a traditionally regulated field. what apple's doing right now is reinforcing the stereotypetor a and state has, that these arrogant start-ups don't care about anyone, don't care about the public good. and so every single regulator all over the country will have a harder time. i see this every day because of the position of tim cook. >> i understand tim cook's point if every government official from everywhere we do business

can come up with requests like this, i understand wanting rules of the road. >> hold on. if you're uber, you are dealing with government officials in every city, everybody town, every single day all over the world. so does ab&b, draft kings and fan dual right now are dealing with 45 different -- >> there are hundreds of cases. >> that's part of how it goes. no one wants to spend money on dealing with lobbying, government regulation, and lawyers. that's part of business. >> we're talking about legislation that goes back to 1787. it's probably due for a -- >> and there are downsides to living in a free society. i want the privacy for my iphone, and because a couple of people want to perpetrate heinous acts and are terrorists, you always hear, now you're giving into the terrorists by being afraid. by allowing my information to be opened up because a couple of people out of hundreds of millions of people want to do us arm, and we open just -- i'm willing to take the risk. >> you always argue that you

want -- that you have nothing to hide, and that if you actually are not a terrorist, then you're prepared to -- >> that's metadata. i'm talking about calls that go to yemen and not knowing who it is. >> -- arguing that your information is getting opened up unless the government -- >> we have to do this. it's not a big hassle at airports to go through it. but we've screened billions of people, and we're talking about a handful of people that we're doing this for. that's sad to get to that point. and we have to do it, and i understand that -- >> the exact same thing. >> it is the same thing pip understand that, but you know, it doesn't mean that we need to keep giving up our freedom. and sooner or later, you'll be able to design something where there isn't any record -- >> you're always going to do that, but you can say, sooner or later, every terrorist will figure out some way around every system. we try to protect ourselves. >> to take it to the extreme, we should get rid of words, because terrorists are using words, they're sending --

>> no one should go outside at all if we take it -- >> yeah. >> it comes down to choices and preferences. >> it's a gray area and i disagree that terrorists should dictate what i do, my privacy. >> your privacy is lost. >> that's the whole point. coming up, the race for the white house heats up. it's super tuesday. what are voters googling as they head to the booth? a closer look after the break. at mfs investment management, we believe in the power of active management. by debating our research to find the best investments. by looking at global and local insights to benefit from different points of view. and by consistently breaking apart risk to focus on long-term value. we actively manage with expertise and conviction. so you can invest with more certainty. mfs. that's the power of active management.

voters is in 12 states head to the polls today for the super tuesday primary. what are they searching before they vote? la toya drake is a google trend search expert and joins us right now from los angeles. and la toya, are we correct in assuming that in different states, people are searching for different terms? it gives away a little bit about what they're thinking? >> that's exactly right. as we look at what's happening nationally, it's interesting to take a look at what's happening on a local level. but nationally, the top issue we're seeing people search for is gun control, followed by education, and then immigration. but that changes when you look locally. gun control is the top issue in all of the super tuesday states, with the exception of texas and alaska. >> what is the top issue in texas and alaska? >> so in texas, the top issue is immigration. which is no surprise there. and then in alaska, the top search issue is isis.

>> wow. >> yeah. >> okay. a little different, a little interesting. it gives you a little bit of a thought about what's most important to these people, in terms of immigration and gun control. >> it does. >> are they basically the top three or four search items? are they just different orders and different states or basically a national profile you can watch? >> they kind of fluctuate when you look state by state, but we tend to see gun control is an issue that is across the board right now in those super tuesday states. but one of the things we also notice that these issues move around based on the news cycle. and also what's happening on the debate stage. so, we find that search interest really follows what people are seeing and hearing offline, as well. >> i notice that we're also showing some statistics and say which of the candidates is most often searched in different states. what does that tell us? >> you know what? one of the things that we look at when it comes to what voters are most interested in is that it just lets us know that they are really carefully following the issues. when we look at those questions,

for instance, that people are asking, donald trump, will give you an example, people are asking questions based on what he may have said offline. a top question about him is what did he say about the kkk? all the way down to why should i vote for donald trump and how many delegates does he have? we see that people are really, really following these issues, but they are curious about what happened in and around them and what a candidate may have said about them. >> great. la toya, thank you for joining us today. >> you bet, thank you. coming up at the top of the hour, another interview you can only see right here on "squawk box." banned hedge fund manager phil falcone in a cnbc exclusive. his take on the industry, his comeback plan, and a whole lot more. plus, an apple hearing on the hill. judiciary committee member jason chaffetz is going to join us to talk privacy and security. "squawk box" returns with all of that in just a moment.

super tuesday showdown. voters in a dozen states hitting the polls today, with texas holding the biggest delegate prize. the lone star state could be a make-or-break moment for ted cruz. a live report, straight ahead. a squa"squawk box" exclusiv. phil falcone breaking his silence for the fist time since

the s.e.c. settlement. his plans for a comeback and much, much more, coming up. and apple on the hot seat. the tech giant's legal chief and the fbi director set to testify before congress later this afternoon. member of the house judiciary committee, congressman jason chaffetz, joins us before today's big hearing. the final hour of "squawk box" begins right now. live from the most powerful city in the world, this is "squawk box". >> welcome back to "squawk box" here on cnbc, first in business worldwide. it's super tuesday. i'm joe curnow along with becky quick and andrew ross sorkin. futures indicating double-digit gains. checking out the markets in europe at this hour, has been strong for most of the session. still green arrows across the board with germany showing gains

of 1.5% and italy doing pretty well, too. up almost 1.6%. and the big stories today are >> here they are. i'll tell you about them. do you want to hear about them, joe? >> do i have a choice? >> you don't. let me tell you. new york fed president bill dudley is sounding cautious about raising rates. he says the drop in oil and other commodity prices as well as tighter financial conditions could lead to slower growth and weaker inflation. also, dudley says the balance of risks might be starting to tilt slightly to the downside, but only slightly marking down his growth forecast. and that number is now a at 2%. u.s. treasuries secretary jack lew says commitments by china and other countries have reduced the risk of currency devaluations that could fuel turmoil in global markets. lew says beijing has given a clear single it won't engineer a major devaluation on the juan. and yahoo! says it might write

down the value of tumblr, a year after the company spent more than $1 billion on that blogging service. we showed you that the futures are indicated higher. take a look, wti, up as well. it's up about 2% today, after gaining 3% yesterday. latest number comes in at $34.46 a barrel. if you want to check out the treasury market, the ten-year note right now is yielding 1.749%. and the dollar looks like it's a little stronger than the yen. it's down against the euro, which is trading at 108.75. >> and barclays slashing future dividend payouts. the company plans to restructure its business into two core divisions, focusing on its key markets of the uk and the u.s. barclays new ceo speaking with kayla tausche in london earlier this morning. >> cutting that dividend down to three pence was a difficult

thing to do, but necessary to make sure we're unfettered getting that noncore business down sshlly in 2016. and the other issue out there, our conduct fines and litigation expenses. >> we should tell you about a few other stocks on the move this morning. auto parts retailers auto zone reported a quarterly profit of $7.43 a share. that beat the street's expectations by 15 cents. revenue was essentially in line with forecasts, with auto zone posting a same-store sales increase of 6.3%. marathon oil shares under pressure after the company announced a secondary stock offering of $135 million share. marathon says it intends to use the proceeds for general corporate purposes and for funding its capital spending program. >> that's depressing, isn't it? wouldn't you like to sell those at 32? that's like a buyback at 100, you know, when the stock goes to four. selling shares at 7 down from 35. voters in a dozen states hitting the polls today with texas offering the biggest prize, a critical state for ted cruz. now hampton pearson, you're down there, hampton?

live in the lone star state. you are in oil country, houston. >> reporter: we are in houston. we are at st. martin's episcopal church. for those of you scoring at home, this is where the bushes vote when they are here in the area. as you mentioned, texas really is the biggest supersized delegate price here on super tuesday. 155 delegates up for grabs on the republican side. 251 on the democratic's side. now, on the last night of his primary campaign, ted cruz rallied his supporters. he's basically facing what amounts to a must-win situation if he wants to move on and fend off marco rubio and go one on one with donald trump. at that rally, he told his supporters that he in his mind is the only one who can beat hillary and take on donald trump, but he told the enthusiastic crowd he needs a win here in texas to send him on his way. >> if donald trump is the

nominee, hillary likely wins. and our campaign is the only campaign that has beaten and that can beat donald trump. >> reporter: now, on the democrats' side, it was former president bill clinton doing a kind of texas two-step here, filling in for hillary on the last full day of the campaign. echoing her new campaign theme, that they want to make america not just great, but whole again. here in texas, they're expecting a record turnout. there have already been a million early votes cast. the polls here, just opened minutes ago. back to you. >> thank you for that, hampton. now we have an interview, phil falcone breaking his silence and trying to make a comeback. the securities and exchange commission charged billionaire hedge fund investor, phil falcone, with securities fraud back in 2012. those charges included misappropriation of client assets and market manipulation.

the s.e.c. aenlleged that phil falcone had use assets of that fund to pay his taxes. falcone settled with the s.e.c. for $18 million and agreed to a ban from the securities industry for five years. but he now has a new company and is mounting a comeback. he join us for an exclusive interview and is in west palm beach this morning. good morning, phil. >> morning. >> thank you for joining us this morning. let's talk a little bit. we'll do the history in a moment, let's talk about what you're doing now. as i said, you are mounting a comeback, if you will, and you do run a publicly traded company. what is that company and what does it do? >> yeah, it is, it is a company by the name of hc2. it's a holding company and what we're doing, i like to consider it a permanent capital vehicle, where we are out acquiring companies and really building and doing bolt-on acquisitions of the various companies. but it's a diversified holding

company structure, where we are, again, just looking at taking control of companies and acquiring companies. it's very similar to what i did when i ran harbinger group, and when i built harbinger group over the last three, four, five years. >> current market cap of your company is $139 million. you own a number of small businesses at the time, including one that is a resort and casino in vietnam. what's that? >> well, the resort and casino in vietnam is actually not part of the public company. the resort and casino is an entity that i got involved in when i ran the fund. and it's still in the fund, where we own about 85% of the entity. it's a casino, really one of the -- the only one of its kind in south vietnam. and we have been building it.

it's now open. and actually doing quite well. >> locals, by the way, just one fine point on the vietnam thing, i found it interesting, locals in vietnam are not allowed to gamble. so how does that work? >> correct. you know, that was one of the things that we looked at when i got involved about six, seven years ago. we fully expect that and we anticipate locals being allowed to gamble at some point. and that was the opportunity in and of itself, where we got -- we actually took control of one of the licenses. >> phil, given this s.e.c. settlement that you made with the government, what can you and can you not do? you seem to be allowed to run a publicly traded investment company, but not allowed to invest in the market. >> yeah, well, it's not actually a publicly traded investment company. it's a holding company, kind of

modeled after the lucadia, lowe's type of structure. and i can invest in the marketplace. and i think it's important to understand that the allegations at the time were securities fraud, but i never settled on securities fraud. i actually settled on negligence, which i think is very important. you need to understand the dynamic there. with that being said, this company is a holding company structure. i can invest in the marketplace. one of the things i can't do, and i'm currently still running my fund, but one of the things that i can't do, at the moment, is raise outside capital in a registered investment structure. >> i gather that at a conference yesterday, you said that you though you were unfairly targeted by the s.e.c.? >> i don't think i said i was unfairly targeted. i, you know -- it was an

unfortunate circumstance. you know, i think there's a lot of things that people don't know, that, unfortunately, i can't really discuss. you know, it was, i guess, a sign of the times and a function of the times, and it was clearly an unfortunate circumstance, and i had to put that behind me. and it was important for my career to put that behind me. so i feel like i've taken that appropriate step. >> phil, to the extent that you can speak to it, why should investors who are investing in this public entity trust to you, given the fact that you did settle a case that effectively suggested that you misappropriated funds. >> well, see, that's the point. i don't know if -- i don't know if misappropriated funds is the right point or the right issue. and when i talk about certain

things that people don't know, unfortunately, i can't discuss that. but, you know, my integrity has always been of utmost importance to me. and quite frankly, from an investor perspective, that is one of the most important things. and you know, i think that when thinking back and when looking back at it, there were a lot of things around the issue that, again, may have been a sign of the times, as to what we were going through, post the crisis. so, i don't want to say i was a victim of circumstance, and i can't deny the allegation, but it was just an unfortunate thing. and again, i don't think people really know all the details around it. and i can't discuss the details, but, um -- >> phil, i only know what's in

the case, and the case suggests that you used money from the fund to effectively loan it to yourself, that you let certain investors out of the fund and other investors not. i mean, that's what the allegation is. and as i said -- or as you just said, you can't deny that piece of it. i'm trying to understand, to the extent this is a comeback story, you want to have a comeback and want to have redemption, what it is you can say and speak to the investor class who might want to or think about investing with you and why they should trust you? >> well, you know, the reality of it is, again, i think you have to look at the documents. you have to look at my documents. when you talk about a m misappropriation, you -- the -- i think the important thing to understand is that there were certain things i could do. there were certain things i couldn't do. and as it relates to the capital

in the fund, when people talk about using other people's money or using the fund money, i don't think that's, you know, again, i can't go into detail around that. but i don't think that's the case. i don't think you really understand -- you have to, again, kind of look through -- look through all the details to really understand what actually happened. and unfortunately, i can't do that. but, maybe at some point in my career, i can. but, you know, listen, you know, the s.e.c. was in a difficult period coming off the crash and what was happening in the marketplace and there was a lot of different things taking place in the market. and you know, again, i can't really go into too much detail

on it, but -- >> phil, because this is the first time we've had an opportunity to speak to you, though, let me ask you this and let me put it in maybe the simplest terms. is there anything you regret about the actions that you took during that period? >> listen, it was -- i don't want to say it was a mistake, but it was an unfortunate circumstance that took place. and if i had to do it all over again, sure, i would do things differently. but i didn't commit fraud. i didn't violate securities laws. you know, again, i think it's important to understand that i -- it was a negligence. i pleaded to negligence. and i think the media made it out, quite frankly, a lot more than what it was. and there were a lot of things

that were happening at the time. and even as it relates to the short squeeze that i was involved with, that i was involved in, again, those things i can't discuss. i can't deny them. was it unfortunate? absolutely. and would i do things differently? no question about it. but as i mentioned, i think my integrity is of utmost importance to me as a person. and i think that people that actually know me and know the circumstances trust me and, you know, i've made money for people and i will make money for people again. >> phil falcone, five years from now, where do you want to be? where do you want this company to be? do you want to be doing this? do you want to be running a hedge fund? >> no. i've put the hedge fund aspect behind me. i think this is the right vehicle for how i'm thinking

about -- for how i like to invest. i've always had a much consider a very long-term horizon and a long-term view. and if you look at some of the things i've done in my career, it has been typically more control aspect, longer term vision. and when i got involved and when i built harbinger group, took that company from $170 million to where it is, $2.5 billion today. i moved on to this one to create a similar type structure, albeit, with a few different nuances. so where i hope to be in five years is bigger than where harbinger group was and my objective is to keep growing it and to be methodical about it. >> phil, real quick, before you go, i gather you made a comment, i don't know if it was yesterday, about what you described as the mediocrity

within the industry these days. and i wanted to understand what you meant by that. >> well, i think there's a lot of people -- there's so the great -- obviously, some great investors out in the marketplace. but i think it's, you know, there's a lot of people that are running funds right now. and i think there's probably too many people running funds right now. and that's what i mentioned about kind of mediocrity. i'm not targeting anybody or not specifically pointing to anybody, i just think the market -- there's too many funds around. and you'll see times like this where we, where some get filtered out and some end up closing down. and i think that's what you're going to see now over the next 6 to 12 month. >> okay, fair enough. phil, we appreciate you joining us this morning. and we hope maybe we'll have an opportunity to talk to you in person right here in new york. thanks again.

>> okay. thanks. >> thanks. >> when we return, chrysler sales hitting the tape just moments ago. we'll go inside the numbers, next. and later, clarence thomas breaking a decade-long silence on the court. we'll tell you what prompted the supreme court justice to finally speak out. here at td ameritrade, they work hard. wow, that was random. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.

the nation's automakers reporting february sales today. chrysler out just moments ago and phil lebeau joins us now with a closer look. we're expecting a closer look now, phil. give it to us. >> we'll give you a real close look, joe. we were expecting, from talking with dealers, talking with analysts, really everybody in the industry, we're saying solid sales for the industry for the month of february. and that's what we got from fiat, chrysler. the industry was expecting an increase of a little over 8%. the edmonds estimate was 8.6% increase. fiat chrysler coming in with an increase of 11.8%. and as it has been for the last year, year and a half, it's suvs and pickups that are driving fiat chrysler sales. ram pickup sales, up 27% last month. jeep sales, that's suvs, guys, up 23%. we're going to get ford and gm within the next couple of hours. the sales pace that people are expecting for the month of february, and keep in mind, it is the slowest month of the year

for auto sales, but the sales pace is expected to be probably between 17.6 and 17.9 million. guys, back to you. >> that's amazing. as you said, nothing like a buck 50 a gallon for jeeps and all the different products and the rams stuff, too. the whole jeep asset has been marked up in light of this thing. >> that was the one asset that everybody wanted, when chrysler was laying in the trash heap and they were saying, let it go. let it go, completely. sergio wanted jeep. >> and it -- i mean, what a franchise right now. >> thanks, phil. coming up, when we return, royal caribbean's "anthem of the sea" ship is cutting its voyage short. what caused the captain to change course. as we head into a break, check out the futures. dow looks like it would open up about 94 points higher. back in a moment. we needed 30 new hires for our call center.

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welcome back to "squawk box." let's tell you what's going on with wti crude. you're looking at wti crude, it's moved up again. we're at 34.30 right about now. and royal caribbean's "anthem of the seas" cruise ship will cut its latest two days short because this time the -- something they couldn't control, it's a severe storm forecast. this is the same ship that

sailed into the atlantic storm in early february, forcing passengers to stay in their room for 12 hours, as the ship navigated 125-mile-per-hour winds. royal caribbean tweeted that some of the guests on the current trip have experienced norovirus symptoms. but that is not why the company is cutting the voyage short. and clarence thomas, who hasn't asked a lot of questions over ten years, finally did ask a few. he spoke during oral arguments and it was about a -- i think it was about a second amendment case. it was exactly ten years and one week after the latest question that he asked. and this time, he asked ten questions to a justice department lawyer, in a case over banning someone with a misdemeanor domestic violence conviction from owning a gun. thomas has been criticized for his silence by some who say he's

neglecting his duties on the court. by justice thomas has said he doesn't need to ask questions as he relies on written briefs in a case. and he has written opinions, et cetera. controversial justice has been in the news in recent days for other reasons. i don't know if you saw it, but some of the more liberal networks, he doesn't count apparently as an african-american on the court. so -- you didn't see all that? >> i did not see that.

♪ change the channel. welcome back to squawk. what is this? >> i have no idea. >> is this the biebs? >> oh, it's rihanna. >> it's the biebs' birthday. that's why i thought -- >> it is? >> yeah, he's 22 today. >> same voice. >> yeah, similar voice. >> chris rock had a great -- >> a bieber thing?

>> no, a rihanna thing. >> oh, i heard that. that was kind of funny. welcome back to "squawk box." among our stocks to watch -- i read about it. i didn't see it. i'm on a record, i think seven or eight years i haven't watched that. shares of casino operators are rising on signs that the gaming revenue slump many macau may be bottoming out. revenue is virtually unchanged from a year ago compared to forecasts of a 2 to 10% drop. apparently, it was almost record-low ratings. >> for the oscars. >> which is hard to believe, when there was so much, you know, preaching and controversy and all the good stuff you hope for in an awards spoken, for people that memorize lines and pretend to be other people. >> we think people who read prompters should get awards. >> dollar tree shares under pressure this morning. the discount retailer missed estimates by 6 cents with quarterly profit of $1.01 per share. revenue is also below forecast. and united technologies was

upgraded to outperform from sector perform at rbc capital. rbc says it now considers the company to be in play, even though it rejected an overture from valeant. and the securities and exchange commission launching a new probe into valeant pharmaceuticals. the s.e.c. requesting information about the drug company's now terminated follows relationship with that pharmacy distributor. the news sending shares tumbling to valeant's lowest levels in three years. and the ceo pearson has returned from medical leave. they delayed the company'ses -- there we have it, canceling a first quarter earnings report. they didn't like the first quarter report. so they're just moving right on to the first quarter, steve. they're canceling any release at all of the first quarter. >> pick up one things look a little better. >> i would think the s.e.c. would make them eventually report the fourth quarter. >> they're going to. that's what they said. >> you're focusing on your report. >> my report. >> you can't cancel an earnings

report. >> i think -- isn't there some law on that? you would think there would be a law. >> this is a quarter we would really like to forget. we're just going to -- we'll talk to you in the first quarter. stay tuned. >> we did have some breaking news now on the state of small business. the paychecks higheri index sine last april. that's what we heard yesterday from berkshire hathaway's warren buffett. >> business, i would say, is a lift softer in many places than i anticipated, we'll say, four or five months ago. that doesn't mean it's in reverse. the country's not going to go away. the clients aren't going to go away, the talents aren't going to go away. the country will grow in value over time. >> here to take us inside the report and react to mr. buffet's comments is marty moosy, president and ceo of paychex. marty, the numbers are the best we've seen since last april. what do you think's happening? >> i think you're seeing construction come back, becky.

i think the good news here is this last three months has basically made up for all the decreases we had last year. it's a pretty strong last three months for us. and it's broad-based, across all regions, pretty much across the country, other than the west north central, which has gotten hurt by lower oil prices. but generally it's across the u.s. broadly and strongest in the washington state area. and also in the southern regions. very strong in the southern regions. that's construction, i believe. >> just in terms of the region themselves, it looks like the mountain region has done the best. what's at play there? >> well, i think it's still high-tech jobs. you're seeing it in washington state, you're seeing it in seattle. that's where the best growth rate is. but the good news here is that we are seeing it two months a row, an increase in the job growth rate in small businesses under 50 employees. and it's across the country. south is seeing the biggest growth, though. the southern regions. florida moving up into the second spot. that's good news, and tennessee moving up as well. >> marty, we've seen wage growth

kind of start to pick up on a national level, too. do you measure that or have a way of getting at that? >> yeah, we do. and actually, what we were seeing a little under 2% wage growth for many months. now we're seeing it closer to 3. so we definitely have seen the wage per hour go up, pretty strongly here in the last couple of months. >> is that a story of minimum wage going up, or do you think that's just a story of stronger business and people being able to pay their employees more? >> well, i think a couple of things. one, you'll start to see the minimum wage increases start to play into that. so that's probably still a little bit early. but you're also seeing a scarcity of workers. you know, as the unemployment rate comes down, i do think wages have to go up a little bit, to keep people, and to hire ones. >> is that in the construction industry, in particular, or do you think that's pretty broad-ranging? >> i think it's fairly broad, from what we see, but construction certainly has been up for about four months in a

row now from a job growth perspective. so we definitely see it in construction, and in leisure and hospitality. so gas prices down, more discretionary income, more spending on leisure, hospitality, and other personal care services. >> steve liesman is here. >> marty, we've had a lot of announced job cuts from the big companies. and that, i don't think, is going to show up in the current jobs report. but what about subsequently, does small business eventually take it on the chin when the big businesses cut back? what's your outlook here? >> yeah, we don't necessarily -- you do usually see that, steve, because if big business like the oil industry, in houston, we've definitely seen houston has dropped tremendously in the job growth rate for houston, because of oil, and it's all the side jobs around it. small business, around housing, it's restaurants, and small offices of service companies, they do get hit. and sometimes that follows, but right now, you're seeing in the southern regions, construction up, and leisure and hospitality, you're seeing it in california

in the pacific region, and in the mountain region, as well. nice, strong growth in -- a lot of part-time jobs, but still nice growth. >> all right. marty, thanks for joining us today. >> great to be here, thanks. in addition to being a big political week, it's a big week for the economy and the markets. and steve liesman who just jumped into that last interview joins us now what little bit more on what to expect. >> andrew, there are concerns about brewing economic weakness overseas and now at home, but wall street seems fairly confident we're going to get another strong jobs report. here's the road to that friday jobs report. the view could change this week as the data comes in, but there are expectations for the key data leading up to the jobs number. manufacturing seems to be contracting yet again at 48.6. adm peoples relatively strong at 185. jobless claims at 270. services will contract, but will come down a little bit, but still show expansion, plus 50 there at 53.

and there's the non-foreign payrolls estimate, 200,000 yet again. behind that optimism, surprising strength in the jobless claims reports. it spiked towards 300,000 in the middle of january. but it's come back down in recent weeks, towards the 260, 270,000 range. the concern is that job cuts announced during the recent bad earnings seasons are in front of the economy. and could dampen job growth in the months ahead. recent market gyrations and growth concerns leads fed president bill dudley in a speech last night in china to suggest he is not in a rate hiking mood. here's the quote we've been talking about all morning. the balance of risks to my growth and inflation outlooks may be starting to tilt slightly to the downside. by the way, the fed is starting to sound a lot like the old fed, under greenspan. it's using this balance of risk assessment to signal which way it's going on rates. that was a trick that greenspan used. so we want to really follow that language closely. >> people caught off guard, kind of a constant scale.

>> becky, i want to ask you about buffett. he seemed like long-term, he has this positive view on the u.s. economy. but a little squirrely in the next four to five months, is what i was reading. >> he said that if you had asked him four or five months ago, he would have been surprised that the railroad, burlington northern, hadn't done better than it had. he said it's not burlington northern's fault, but overall, the industry economy and things that he's moving. he also said in his letter to shareholders that he expects burlington northern to have a worst this year than last. >> did you think his body language had changed? >> he didn't say anything. >> he kept bringing up like matt rose, this person, this person. >> andrew, we've got to take a shot at you. people think we've changed the background now. >> what's that? >> you are -- look like a big stella artois. >> how much are we paying for that? >> you can't even tell it's a

truck, though. it looks like we've somehow just sold out and now have sponsors. >> unfortunately -- >> i like stella. >> my conspiracy theory is some of these truck guys actually know what they're doing now. >> this guy is not even -- >> we've had this happen a handful of time. >> that's an anheuser-busch -- >> some of these guys actually do know what's going on. >> that is right next to your head. and you -- >> stella! >> all right. so 200, liesman? >> that's the forecast. i haven't done my work, as you know. we'll get the manufacturing numbers. hey, i was pretty close last month, you know? i was due for a good month after a couple of big misses. >> you were the worse. you were a 140 and we did 290. remember that one? >> i forgot that. somehow, they forgot. >> like valeant's fourth quarter earnings. >> look, i'm very up-front and transparent. my model runs plus or minus 50,000, which is about as good as anybody does on the street. >> i don't even wind my watch and it's right as much as you

are, twice. kidding. anyway, thank -- it's a joke. >> that was -- oh, that was a joke! that was a joke! silly me. >> like one of your economist jokes. >> do you want one? >> no! >> no. >> you got one? >> yeah. a stock broker and an economist are walking along the street, there's a $20 bill on the floor, on the street, and the stock broker bends down to pick it up, and the economist goes, what are you doing? he goes, i'm going to pick up the $20 bill, and he kind of says, you idiot, if that was a real $20 bill, somebody would have picked it up already. and all of you economists out there and you students know what i'm talking about. it's rational expectations. it's -- come on! that's hysterical. >> no. >> no, it's not. thank you, steve. >> but that was quick. >> appreciate -- >> mercifully quick. >> can i just say, you did not disappoint. >> i want to give him kudos on

the timing. >> i'm working on the material. >> we got to go! >> sandy's in the back screaming, we've got to go! get out of this! screaming! >> did you hear the one about the guy who went in for a physical? no, go ahead! >> apple set to make its case before congress later today. a member of the house judiciary committee, congressman jason chaffetz will join us next.

welcome back to "squawk box," everyone. shares of marvel technology

getting a boost. the company says that its audit committee investigation has been completed and no fraudulent activity was found. marvel. which i realized as i said it. marvel's the comics -- >> the other one's bought, though -- >> marvel is owned by disney. >> yeah, bought. >> what was that? >> somebody's phone. >> not mine. big day for apple. hope it was someone hacking into your iphone. >> thanks. >> on capitol hill today -- getting rip through your encryption -- >> i hope they are. >> i hope they are too. all your sources, all your bank accounts and 401(k). who's this? oh, fbi director comey and apple general counsel bruce sewell set to testify before the house judiciary committee. yesterday, apple attorney theodo theodore boutrous had this to say. >> the government is trying to portray this as national security and law enforcement against other interests, but they overlook the security interests of citizens, their data. so we do think this is a very

significant risk and that we're better off protecting data and not creating this tool, which we think would be dangerous to everyone. >> hmm. i agree. joining us now, congressman jason chaffetz. he sits on the judiciary committee and will be at the hearing today. i'm exhausted already, congressman, from an earlier discussion we had. because to stand up for what's right and what's good is exhausting, a lot of times. and it takes a lot out of me. but here you have a company that's literally has spent probably years developing something that's proprietary, this encryption technology, which serves a purpose, and you know, we need to keep this, as we go into the future, encryption is going to be very important. and we see what happens. with either foreign entities or whatever gets ahold of data. so it's got to be done. and every time you try to weaken it, you just better hope it's not a slippery slope. is that what you are on this, or are you somewhere else?

>> no, i really am. i think if we put two phones in front of you and said, one's encrypted and one's not, which one are you going to pick? of course you're going to pick the one that's encrypted. that's the one i want to have, that's the one i want for my kids and for my wife, because they're honest, decent, hard-working people and we want to protect our data from all the hackers we know are out there. so i'm more in the apple camp on this one and saying i think it's a dangerous precedent for the government to come in and dictate, i saying, you have to hand the keys over to all of your access and data in case you might commit a crime in the future. >> when did republicans become aclu charter members and when did liberals become the sort of people ready to waterboard terrorists? when did this switch happen? why didn't someone tell me that we were going to switch roles? >> you just have to interview some reasonable republicans -- >> i agree. >> come on, this is -- >> i would try to interview a

reasonable liberal, but i haven't found one yet. >> there you go. that's right. >> do you want to ask him something? >> i do. congressman, here's the question. in the analog world, in every instance where data exists, and so, let's take away sort of wicker and some of these other systems where the data disappears or even snapchat, where the data disappears. but in every other analog parallel, we -- if there is a judge that has a warrant, we allow people to actually get it, what can often be the most sensitive information in the world, medical records, juvenile, psychiatry records, all sorts of things that we've decided, for better or for worse, make the country a better, safer place. why is this different, and why are we suggesting that technology companies are somehow immune from subpoena and warrant power? >> no, they're not immune. from that at all. i would extent to the that apple can comply with this, they should under the law.

part of my question for director comey, and i'm surprised we're doing this a open setting and not a classified setting, but they can see the metadata, they can see which phone was communicating with which phone, they can see where you were when that communication was made and when that happened. but if you're going to actually pry into this data and be able to have this key, unfortunately, in this day and age, you can't keep it away from the bad guys. there's not just a key at the genius bar for the one, you know, person who you want to get after. it's just not doable. it's either encrypted or it's not. >> that's the problem. >> congressman, but that -- well, that is what's up for debate. if i told you that you could actually get at this particular phone, but ultimately, you could keep it safe otherwise, would that change your mind? and let me put a little bit of history out there. for the last five or six years, apple has beenively opening the phone every time the government -- or not every time, but very frequently, hundreds of times, and yet we have not heard of a public instance in which

you and your phone have somehow been compromised, congressman. >> well, look, there's a reason why i carry an iphone, because i do believe it's the most secure way to go. >> but sir! but sir! over the last five years, apple has been opening those phones left has been opening those phones left and right. your phone is no more protected than anybody else's phone. >> i totally disagree to your whole premise. >> and his voice gets loud, too. it's great. >> apple has been able to increase the encryption over time. where does this stop? that's part of my question for director comey as well. will they mandate tesla provide information so you can go back and track where that car has been at any given time, what radio stations you were listening to? what about facebook? can you force facebook to do certain things, track your whereabouts? >> congressman, do you think e-zpass should be subpoenaible?

>> what? >> do you believe e-zpass, do you -- >> we don't have that out west. >> do you believe no warrant should be made if a crime has been committed by someone we think is a terrorist that that information is not available to you? >> it is available. it is available. >> that's available. >> that meta data is still available. again, we're talking about trying to break open that phone and look at that content on that phone. the metadata is still out there. there's no prohibition on the government other than having to issue a warrant to get that information. if there was urgency in this case, why didn't they do this back in december? what are they opening up for the future? we have to be very careful here. >> you wear a disguise going into your "new york times" -- do you go in there as who you are? >> i just think -- i think there is a middle ground.

unfortunately what's happened here is this idea that somehow it's absolutionists on both sides. >> they're all whispering, that sorkin guy. >> i'll take it. >> congressman, thank you. congressman chaffetz on the size of right there. >> okay. when we return, jim cramer always on the side of right from the new york stock exchange. we'll talk to the man in just a moment. e*trade is all about seizing opportunity. and i'd like to... cut. so i'm gonna take this opportunity to direct. thank you, we'll call you. evening, film noir, smoke, atmosphere... bob... you're a young farmhand and e*trade is your cow. milk it. e*trade is all about seizing opportunity.

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>> let us get down to the new york stock exchange. jim cramer joins us. jim, one of these days we'll know the two candidates. then we'll have to decide who will be better for the private sector. it's not as easy as it used to be. both sides are talking about no tpp, they don't like free trade. maybe on the republican side, maybe even more anti-free trade. then you have the bank bashing. who is better for the market? >> let's go over jeff immelt's letter, signaling that the relationship between government and business worst ever. that would be both parties. i wonder if there isn't a backlash by business against the globalization -- anti-globalization move by trump. i think trump is saying let's

take it to the chinese. if you're selling a lot to the chinese, you don't want to take it to the chinese. you're right. everything is upside down on a lot of different issues. that's why tonight is so important. the traditional gop is saying, wait a second. a lot of our ideas really disappear under trump. i know, i agree with you. i think it's kind of not really clear who is best for business, so to speak. >> i love with hillary, it's like, oh, she never really says anything. she's never really talking what she's really going to do. she never speaks the truth. >> whatever the poll says, right? >> you can't believe whatever she says. she's not like bernie sanders. she never says what she believes. >> i want -- here's what i want. i want business people to talk with politicians without feeling they'll be trashed by other politicians for doing so. >> yeah. >> right? >> a ceo should be able to speak to a politician without ruining that politician's candidacy.

>> all right. it's like a hissenburg thing. >> thank you. 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.

let's get one last look at

the futures. the dow is still up by triple digits, a gain of 103 points. s&p 500 up by 13, the nasdaq up by 31. >> take a shot of andrew again. >> oh, coca-cola. >> unbelievable! are you getting something? >> payola. >> that stuff is worse than alcohol, that -- >> soda is i would you're fat. >> call warren buffett. >> join us tomorrow. "squawk on the street" is next. ♪ >> good super tuesday morning. welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. the premarket is solid for the first day of march despite disappointing macro numbers in china and europe. we have those dovish comments from dudley which might explain some of this. china got a chance to digest that reserve requirement ratio cut. back home