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 ism and auto sales in

a few moments. apple and the fbi on the hill today walking the encryption tightrope. the keys to watch for. >> united technologies/honeywell saga continues. i will give you new details on the drama. >> and it's super tuesday. why today's results are so important and what to expect from each state. >> let's get to honeywell and united technologies. yes, continued drama, but it's over, actually. >> what? >> yeah. the drama has ended. honeywell says it is no longer pursuing a combination with united technologies due to that company's unwillingness to engage in negotiations. it was about a week ago, a little more than a week ago when we first told everyone about conversations that had taken place between the two companies, about back and forth that had been going on for quite some time. most recently a proposal from honeywell to acquire" for about $108 in cash and stock. during the last week, honeywell has amped up the pressure, made

public that proposal and tried to convince united technologies shareholders that there was a way to get this done over the objections of united technologies in terms of at least their focus on the antitrust impediments they saw in a particular deal. but honeywell this morning deciding it will no longer pursue united technologies. at least for now. it won't try to negotiate, it says, with an unwilling partner. it strongly disagrees with united technologies' antitrust concerns and honeywell is having an investor day tomorrow. this kind of clean the deck for them to focus with their own investors on the benefits that they see for their own business. i will tell you, it doesn't mean this is done in the longer term. the history between these two companies is certainly one of a back and forth. in fact, it goes back beyond just recent days. by the way, let me read to you a

quick quote from the press release. we remain confident the regulatory process would not have precesented a material obstacle to the transaction. in our approach to the chairman and ceo on february 19, 2016, we hoped to continue amicable and quiet discussions of a combination. in fact, we were told by them during the meeting that such combination, and this was a quote from mr. kangas, would be fabulous. they would take it seriously and get back with questions within a week. we made it husband, honeywell decided to make it public. united technologies came on saying no way, no how, antitrust is a deal killer. here we are. interesting back in may of 2011 utx also approached honeywell. i looked at an e-mail, jim, that

shows that mr. hayes, when he was cfo believed a combination back then -- remember, united technologies back then was also the pursuer, would have only involved or required 2 billion to $2.5 billion of divestiture. united technologies says the numbers are far higher. essentially the portfolios line up similar as they did in 2011 when mr. hayes did not believe in any way that the combination would prove to be a high-risk venture. >> wow. wow. 2.5 -- these guys, if you were dave cote and you heard that 2.5, you would jump at it. i understand why you would initially think this is the greatest, then when they back away say wait a second. we'd do that in a heartbeat. two very different approaches here. honeywell believes they could get the deal done. you heard christine varney last

week talking about why they believe united technologies is entrenched. united technologies believes, no, not the case. we truly think the antitrust impediments would have doomed this transaction and put uses in us in a poor position. honeywell missed the window for filing proxies to try to get nominations to the board of directors. but nothing says, given the long history between these two companies, 2000, 2011, 2015, 2016 comes the other way now from honeywell that there won't be yet another approach. the key, it seems to me, jim, is for utx to figure out a way to get its business operating in a stronger fashion, get stock price up and become more immune to a potential challenge when the window is open from honeywell. >> is that why the stock is not back to 87, 88? >> maybe. you know there's one day a bid there, right? may give you a little premium. >> wouldn't you love to speak to

dave cote about that? >> i think you might do that. >> tomorrow on "mad money." it's called promoting. what i think is most amazing about this, before this discussion, the quart their honeywell delivered was so good, i thought the stock would have gone to 108. then the discussion might have been better. but why -- just -- if honeywell kept going up, the discussion would be easier. >> yeah. when you face a ceo of the company saying no how, no way, we believe antitrust. not to mention this would have gotten more personal the longer it went on. i think there were going to be more specific attacks made against mr. cote and the other way. there was some focus on that stock sale which he had, which was strange. it was strange. >> we'll have to ask him. >> ask him about that. why is he selling stock the day he's call being a proposal. then some other things that might have come up.

not worth discussing because they're not going forward i think it would have gotten more personal. they may have known that and said we're not willing to do this at this point. >> these are two titans of -- mr. hayes is new, but loved. whenever you hear about him, he's like the new united technologies. the old -- there was flamboyance to the previous ceos. flamboyance being code word for flamboyance because when jefferson, dalai lama, me. he's just one of us. he's like let's have a brewski and solve that. cote is like let's have a cement head. >> puts rbc -- they upgrade because -- >> they put it in play. >> united technologies in play. >> yeah. >> let's put it on play. like mickey rooney and judy garland. who else would buy united technologies? >> nobody. >> nobody.

>> no. no. >> nobody. >> moving on to apple, apple and the fbi on the hill today. apple's general council awill testify in front of the judiciary committee after a brooklyn judge sided with apple last night. here is ted boutros on "squawk alley" yesterday. >> if apple were willing to do that in this one particular case, every other country will say you have do it for us. create and let us use that software you created to access the data of citizens in our country. that is a very serious concern. again, i think it's inaccurate for director comey and others to say this is a one-time shot. they know prosecutors are lining up in the united states and around the world. so it's a very serious concern. >> this judge, ornstein, rejecting the argument.

lowell mcadam of verizon is putting a post up on linkedin backing apple saying we support the ability of strong encryption with no back doors that would enable government access to private information which we feel would degrade security and privacy for millions. >> you get a smart judge from the eastern direct a republican this morning on "squak" saying there's a right to it. now you realize maybe why fed chief comey was a little more circumspect when he was on the hill. this writ, you're using an early law in our country's history to crack the iphone. >> right. this is not as clear cut. >> no, mcadam goes on the one hand, on the other hand. on the one hand, on the other hand, and then comes back to say we think the apple case presents unique policy issues addressed

by congress. >> which means it won't be addressed. >> the court also -- >> it should get to the court. >> we don't know. it cuts across ideologies times. >> but the attorney general of the united states, if he was involved, would be saying we're going, we're going, we're going. not going. chief -- did you see justice thomas spoke yesterday? >> he did. >> everything changed. >> that attorney must have been floored. >> don't you think? huh? >> cats and dogs living together. >> you have ever been there? ever been to the supreme court? >> yes. >> it's very exciting. mr. justice -- >> shut up. they say -- they are so rude. >> they take turns. >> they're so rude. you're shaking they're so rude. >> the judicial to the executive, 12 states voting today in the single biggest day of the primarprimaries. john harwood has more. what a day it's going to be. >> what makes this tuesday super

is the race goes national. contests across a dozen states that helps the two candidates leading national polls, hillary clinton and donald trump. check this map of what's in play. strong southern accent. that's why they call it the s.e.c. primary. but also northern contests like massachusetts, vermont, minnesota. clinton is likely to dominate the democratic south with help from the african-american voters who powered her south carolina victory over the weekend. but the republican race is more complicated. ted cruz appears to hold a narrow lead in his native texas. he must hold it to keep the nomination hopes alive. marco rubio and john kasich aim to rin dewin delegates even if don't beat donald trump anywhere today. this would bring up do or die primaries on march 15th. that's winner take all contests if kasich wins ohio or rubio wins florida. if they don't, donald trump will

be steamrolling towards the republican nomination and then the question becomes will bitter splits over trump's charged appeals to white voters split the gop and cripple his chances in november? >> we'll be hearing from you a lot today, john. >> yeah. when we come back, valeant's rocky day on wall street and gopro's ceo. the stock is down 80% from the summer. look at the premarket as we begin march, which, along with april, marks pretty much the best two-month performance for the s&p 500. >> unusual. we don't talk about that enough. >> more "squawk on the street" in a minute.

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>> we have a couple good auto sales numbers from nissan and fiat. >> strong numbers coming in. this is portending a strong sales rate for february. ford coming up with sales up 24.1%. the strength, as it has been for fiat chrysler, nissan, with suvs and trucks. listen to this number. ford suv sales in february up 22%. trucks up 5%. overall an increase of 20.4%. we will get the gm numbers shortly. basically what we're seeing, much better than expected sales

in february. i know it's the slowest volume month of the year for the auto industry. this shows we're not seeing a slowdown in terms of sales. people coming into the showroom and buying. >> thanks for that. you think this is an important set. this is the most important. this could put the end of the peak auto, it could be the end of that negative piece about peak auto. i met with mark fields, he was saying i don't know where this whole theory is coming from we're not seeing that. we're seeing huge vehicles, huge margin vehicles, particularly the f150 coming back. don't know if you saw gm has to go to aluminum for trucks because the demand is for aluminum. if we can break the stranglehold of negativity about peak auto, which i think also auto zone could help us, if we could break that, i think we'd have a leg to stand on about some major part of the economy that's not as bad

as we thought. a lot of business goes with autos. >> no doubt. >> big. big positive. now, i'm sure someone says, well, we have to tighten. can we take a positive for 30 seconds? mark fields is saying, listen, this stock was selling six times earnings. this is crazy. >> i wonder whether there's going to be a discount to the multiple for all these things forever now since this idea 15 years hence you will have fleets of autonomous vehicles, it will be a much smaller overall sales number. >> not if they're hitting buses. >> see that story? >> 2 miles per hour. >> the bus is a big thing to hit, my friend. >> first actual accident. >> how about if it hit a barn, would you change your mind? >> i'm not going to change my mind. this is coming. >> i bet -- a viewer writes in and says they can hear dealers say, hey, rates are rising, buy now. is that part of it? >> did kind of happen on

housing. what's really -- this is something that the consumer is spending on. we looked at those numbers for jcpenney and macy's, we should be looking at the number for autos. people are spending on autos, home goods, home depot. i'm saying, okay, david, it may be a discount, but not that much of a discount. that's like an airline discount. >> right. i get you. >> you're right. you're right. gm would put money with lyft. younger people are not driving as much. we heard from warren buffett yesterday, geico, there's more accidents. there's more reasons you want driverless cars. you can text all you want with a driverless cars. people seem to love to text and drive. why can't they come up with something to disable that? >> horrible thing to do. >> why can't they disable that? dan hessy when he was head of sprint he worked hard to get your car to disable texting. >> it's frightening how many distracted drivers there are.

>> crazy. >> and fast. >> i'm scared to death. >> my wife takes pictures of them. >> she did? >> what does she do, call police? >> no. i don't know. >> is that a -- >> we'll have a montage. >> is she a vigilante? >> a wall of shame. >> jane is a vigilante. i didn't know she is a vigilante. is she like bronson in those movies? >> texting and driving and litter. vigilante, baby. >> wow. >> we've got -- >> wow. >> -- to take hold of this city. >> there you. filthy down. >> we'll get cramer's mad dash and count down to the opening bell. we kick off the march of month, super tuesday, ism in about 40 minutes. don't go away. agement. 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

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>> i think if you look at the full year 2017 guidance, we took it up across the board, from a revenue perspective, billings perspective. for q1, the subscription numbers is all over the map. we could have done a better job guiding wall street as to the seasonality of our business. i think we put something in the report that will give people more understanding of the seasonality. but there's -- it was a very strong guide for the year. that's what we're focused on. >> all right. that was aneel bhusri. that's what we will talk about on the mad dash. this is the quarter i was waiting for from workday. the stock has been struggling. aneel bhusri had been fighting oracle coming in and saying we

will give you the stuff. they were gone to win over all of workday's customers. workday is winning head to head the vast majority of time, i know mark hurd may disagree. happy to have him on any time. david, this company's back. it was a great quarter. the deferred revenue was big. operating cash flow was big. not saying ignore the losses but they are still going for broke. bhusri is take iing businesses. bank of america, finance stuff, this was a break out quarter for workday against oracle and s.a.p. >> something i want to point out more often for these companies is the adjusted ebita number versus overall. they all adjust for share compensation. in workday's favor they go to great lengths to explain why. most companies don't. but they do share base compensation, an important aspect of compensation over

employees, management believes it's good to exclude compensation benefits to understand long-term performance of our business and facilitate comparisons or results to pure companies. why do they do it? everybody else does it. >> these guys are transparent. i still recognize marc benioff, ceo of sales force. look at the deferred revenue. if you look at that for wash dada workday, fabulous. operating cash flow, it's great. this one is back. it's going to be big again. people better get on board. workday. >> you don't care about these companies that exclude compensation -- >> it's a land grab now with them and human capital and finance capital. if they have been winning over banks, they have morgan stanley, bank of america. they want the ohio university, they won arizona state. great relationship with adp. david, this one has been penalized enough is what i'm

saying. you may see these levels some day again. s.a.p. and oracle, bring it on. that's what they're saying. i want mark hurd to call in. maybe appear on the show. >> all right. >> big, big, big, david. big, big, big. >> big, big, bill. >> aneel bhusri, big, big, big. >> speaking of big, losses yesterday in valeant were big. we'll talk about that stock after the bell. and can you explain why you recommend synthetic over cedar?

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. you're watching cnbc, "squawk on the street" live from the financial capital of the world. the opening bell in under two minutes on a busy day to start the month. super tuesday, we'll watch apple and the fbi on the hill and tack stock of pmi numbers. china deeper into contraction. >> 106 billion added to boost growth. still in that moment where people say, wait a second, bad could be good with the chinese. i think bad's bad. but it's going to move up. there's been a lot -- baltic straight up again.

miniscule, but you're seeing the freeports, the steel companies do better. that's all belief that maybe our country is not doing that bad. the transportation bill seems to be helping. thank you, matt horowitz, for that point. the person who writes for me. we are ignoring the chinese stock market. the chinese stock market traded up in the last hour. but, remember, this market is down big. it seems like people are saying, wait, we're all right. valet is okay. bhp hitting a bottom. we're ignoring earnings from barclays. we're ignoring barclays. >> glenn glencore. >> how with we ignore these. >> people are not talking about european banks. two weeks ago, a big krconcern.

now less so. >> dudley saying downside risks are increasing. he ceasees 2%. >> he caused a rally in china which caused a rally in europe and then a rally in the united states. he was the most sanguine who replaced bullard who was more s circumspect. >> like a pasteesh. >> if not a mosaic. >> huntsman corporation doing the honers. at the nasdaq, alexion pharmaceuticals focusing on therapy in rare diseases. >> there was a period where you thought every biotech would be taken over. the biotech hangover has been one of the big -- >> healthcare yesterday, they just started selling it big time. >> holy cow. >> may have been started by

valeant. >> valeant. >> a lot of things. endo yesterday. >> endo -- whoa. >> endo days. >> horizon. >> how is diplo doing? another bad one. >> valeant was in part a focus yesterday. you know, if you ever were in the communications profession trying to argue the merits of why you matter, you could say, well, here's why. look what valeant has done over the last five days in terms of it's inability to appropriately communicate with its base a series of missteps that led to significant drop in its share price. last week on friday, they were scheduling this meeting on monday with then ceo howard shiller only to cancel those meetings when mike pearson comes back as ceo on sunday and withdrawing guidance, then scheduling a meeting for monday

with analysts late in the day that they cancel as well, because people in the press found out about it. not to mention they have generic competition to a key drug from salex pharmaceutical, a company they acquired a year or so ago. this news about a different s.e.c. investigation, not a surprise, perhaps, for a company under the microscope. this one also thought to have been going on for quite some time. apparently freedom of information act request helped some service get ahold of this. they confirm it. we don't know a great deal about what it's about. you talk about a series of missteps by a company that many would argue at least you could have if you had a real strong communication strategy, you could have figured out how you want go about doing this. it's not clear to me that anybody knew pearson was coming back until he said he was coming back. >> this is a public company. you have an s.e.c. investigation, it's always good to get that out.

i believe it could be related to the revenue recognition, oh, listen, we put a little too much in 2014. i can tell you that the s.e.c. hates that. that is like -- you get your butt in here right now. so, the idea that somehow they could just kind of gloss over everything. this company was at 130 when the new york someti"new york times" about that way they did sales with captive. then andrew -- remember citron? >> yeah. >> he used a $50 price target at 140. people said that's outrageous. $50 price target. could be there. >> this may be nothing more than a bunch of miscommunication with one ceo leaving for the interim, one comes back. perhaps mike pearson needs nothing but time but to review the budget before they go out with new guidance. hence the pulling of the

previous guidance. as for an s.e.c. investigation, certainly many would say the company was already investigating itself because it knew that the s.e.c. would also be looking at it. >> yeah. >> and they have a lot of debt. don't just look at the market cap and say aren't the sum of the parts here worth more than the whole? they have 30 billion in debt. but people will look at it at 63, is it that much worse? how much worse can come here? it's not, if you don't believe -- >> don't look at me. accounting irregularities equals sell. >> you wouldn't touch it. >> we have hillary clinton naming valeant by name in ads now. you think that's a drag on the sector? >> i think the accounting irregularities. i have to know more about them. i think hillary clinton has kind of taken aim. i think that she's hurting a lot of the companies that seem to have a similar roll-out business model. but they're very different in some cases. i think, david, this was the worst public disclosure i've

seen in many, many years. >> they've done a terrible job of communicating. >> yeah. >> there's some big holders, they staying with it? >> ackman is staying with it. we spoke to him. he said -- >> when was that? >> that was yesterday, i think. he spoke to mike pearson, a statement from bill ackman, second largest shareholder. we're delighted's mike's health has recovered and he's returned as ceo so he can work with the shareholders. we expect that much of the uncertainty will be resolved in the short-term based on publicly available information. it appears that valeant's core franchises remain strong and they believe valeant will do a much better job managing investor and public relations. >> when you say you're investigating yourself, the government tends not to think that that investigation is good.

let's say you hire an outside firm. they're doing an investigation. the government wants to see the investigation. it's not like they're saying, look at that, they hired a blue chip firm, they have paul weiss, i'm fine. no, still you have to come down and explain yourself. i think there was another unreal aspect of -- listen, we did this internal investigation. we're cool. government doesn't like that. hey, you know, we're fine. there is no fine. the company can't declare itself fine. doesn't work like that. i was shocked that they said that. shocked! >> ford is the best s&p gainer. here's gm's number. >> gm down 1.5% for february, well below the increase of 4.1%. general motors attributes that decline to the fact that they cut daily rental fleet sales by 35% in february. if you look at the retail sales, that's through the dealerships

that you and i would go out and buy a vehicle, if you look at retail sales, gm says sales were up 7% for the month. overall gm suspecting the monthly sales rate for the industry to come in at 17.7 million. we'll get that much later today. gm down 1.5% for february, well below the edmunds estimate of an increase of 4.1%. >> does that morgan stanley call still make sense? >> i have to asterisk the asterisk there. i know ford is cheaper than that. look, that's disappointing. i was building a thesis there. >> yeah. >> i have to let the facts get in the way of the thesis. >> the -- some of the results out of retail haven't been bad a nice quarter out of kate spade. we'll hear from them this morning. comps up 7.6. good guide. dollar tree comps up 1.7. >> dollar tree mixed. first the stock was down five,

trying to explain it on the conference call. i think handbags are back. i think kors did better. i like coach. i think coach is on a major turn. i do. footwear and apparel, i think foot locker was overdone yesterday. dollar tree being down five was wrong. there's a lot to explain on the stocks. but overall, i think that we still respect the housing thesis as the place for retail. and when home depot was down, that was a mistake. should be up. i said tjx is terrific. that's home goods. they're doing it right. restoration hardware, too much inventory. inventory. eyes bigger than -- they had this growth strategy that was a little ahead of itself. >> wynn, once again, doing the best levels since august. >> we pushed that hard last night on "mad money" because i think steve wynn is back. the macau numbers were good. his last conference call, stock

up. the last conference call was more bullish. chinese seem to be relenting. vegas used the term terrific. i like win. i wish it would come in. i like steve wynn. steve wynn is a true great american. >> i did want to mention a piece of business this morning. a secondary in motorola solutions that has msi down a few percent. value act, one of the large shareholders, a big win there over many years. $355 million offering. 5 million shares at 71. value act selling a significant part of its ownership of msi. >> really? >> yeah. stock is down. 71 is the offer. last sale had been 73.49. 5 million shares in the secondary. >> that's not as big obviously as the -- that stock has spiked. the marathon offering from marathon is marathonic. >> right. that's up -- that's a primary offering. >> yes.

primary. $1.3 billion. upside of 145 million. earlier 130 million. $7.65, that's the piece of business to watch for today. exxon did a $12 billion bond deal. the new field exploration deal was a 23.25, that worked. the devon deal worked. these primaries for the oil companies, they've all been good. a lot of people are thinking i want to be in this marathon of marathon. it's probably not a bad idea. >> all right. let's get to mary thompson on the floor for us. dow is up 73. >> hi, carl. the dow is off the best levels of the day. we begin march which is a seasonally strong period for the stock market. march through the months of may. coming into today's session, the markets and premarket were getting a lift from oil prices. keep an eye on that. in the last ten minutes or so we've seen a pull back in oil prices. crude trading down 9 cents at 3

33.63. there's been a tight correlation between the performance of the stock market and crude oil prices. the u.s. market shrugging off weak manufacturing data in asia and in europe overnight. we'll see what happens in the u.s. when the other data here, the manufacturing data here in the u.s. is released. look at europe, getting a lift earlier from the strength in oil markets. europe is the focus for a couple of u.s. companies. most notably, the parent of the new york stock exchange, the cme or the chicago mercantile exchange. both of these exchanges say they are considering a bid for the london stock exchange, which has already received a friendly bid from deutsche bourse. they have not made a bid yet. that stock offer from deutsche bourse, reports say that could be topped by i.c.e. and cme. on the european theme, checking the european banks after

barclays cut its dividendividen saying selling assets after weaker than expected profits. the european banks have lagged u.s. counterparts in basically bolstering their balance sheets, de-risking books. barclays undertaking that now. you can see stock down 8%. again, a lot of disappointment on it having its dividend. turning to the energy sector, this is one we want to watch. right now it's up. as we look at some of the components of the energy sector. that offering by marathon expected to pressure its stock today. off 6%. the rest, eh, pix mixed picture. glencore in reporting results, believes the commodities market has bottomed. that got the attention of some of the commodity-based stocks in the overnight session. mixed picture now.

bhp billiton getting a lift. the dow holding on to a gain with oil pulling back a bit. we want to keep watch on the market. back to you, carl. >> mary thompson, see you later. >> let's check out rick santelli in chicago. rick? >> i'll tell you, the ism data is important with the string of negatives going on after yesterday's chicago. keep in mind, chicago yesterday, if you go back to january of 20 2015, 14 releases. 8 of those below 50. ponder that. two day of tense. we reversed a bit. maybe the reason is the two-day of bunds. so, we see that bunds have stopped going down. the spread continues to widen. and now it's coming back down. it's around a differential of 160, down from an intraday high of 167. these are the stoppers. you can watch anything you want until your heart is content in terms of fundamentals. the relative value trade is still a very, very powerful trade that does seem to keep ceilings and floors on rates as

we seem to be linked together. the weakest country's dynamics, and what their central banks are doing, that policy invades everybody. so we need to continue to pay attention. if we look at tens my news twos, this is fascinating. it continues to flatten. if it wasn't for the fed's balance sheet and a lot of different policies around the globe, this would point to the potential and more for recession potentially or has some say so about what's going on with the fed. it's hard to get a gps on this trade. if you look at tens, the best place to start is early 2015. many say, yes, we understand the relative value trade, but whether it's the bunds knocking at the door of the lowest yield closing at 7 basis points or the support on our charts, the low on 60s you see there, this is something to pay attention to. technicals seem to work well for the most part even if we don't know the gps with where markets would be pricing if it wasn't for the presence of policy. if you look at jgbs, this is a

20-year chart. they had a negative jgb 10 action for the first time ever. it's going more negative. reminds me of how the two-year in europe first started out, now flirting in the high 50s. that's minus how this solves long-term problems. the last chart, we could talk about the pound. today is one of the few days it has not made another intraday low. it's getting close. whether it's weakness in the pound side of the equation or the euro side, despite what's going on with the yen, the dollar index reaching some lofty levels. carl and the gang, back. when we come back, cade spade out with earnings, and apple and the fbi testifying before congress today. congressman jim jordan will join us ahead of that event later on "squawk alley."

>> check out this video of former microsoft ceo and the owner of the clippers, steve vollmer. yeah, it was during half time versus the nets. vollmer attempting and successfully dunking with the help of a trampoline. "usa today" says if he is not your new favorite owner in all of sports, i don't know what to say. >> steph curry had a further out shot there at the end of the other night's game. >> don't tell me you love him. >> that could have gone a lot worse that could have gone very badly. >> yeah. >> let me tell you, satya nadella has a killer 30-footer. have you seen satya from outside? >> have not. >> i think ballmer is doing what he should be doing. >> taking cheater dunk shots? >> yeah. he could put on that mascot suit and be great at that.

>> yeah, you're right. >> the man can dance. >> he can do everything. >> mark cuban did a 30-footer when i had him on one of my college shows. he has not been on, ballmer. >> no. >> no. >> don't you love the fact that ballmer, he had to have somebody help -- have the spring to do the dunk? >> really? you're going to -- you can -- you can do it without it? >> amy hood, the cfo of microsoft has a better shot than ballmer. she plays small. >> you're not giving him anything. >> aim my tiny hood. >> you're not hearing anymore. >> no. >> we were buddies in college. >> it was -- >> none of that. >> he was business manager -- >> you were all over ballmer. >> we were great friends, but amy hood has a great outside shot. and satya looks like steph compared to him. we will get stop trading with

jim in a minute.

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broadcom, they report march 3rd that was an interesting graphic. >> yes. >> they report march 3rd, this group along with skyworks solution and qorvo and nxpi, this matters. if you look out and avago and broadcom have a good quarter, you will see an explosion in the semiconductors which have been a drag on the market. i'm watching this quarter more than any other in the month of march. >> a nice run. >> yes, it is. this company is a great company, run by some very smart people. broadcom i thought sold out at an interesting price. very good for avago. watch this stock, it will determine the next level of semis. >> what's on "mad" tonight. >> we have wayfair, that's one citron doesn't like. dexcom, that's about diabetes and having pump for continuous

glucose, and susan salka, a monster good healthcare, amn healthcare. dave cote, honeywell tomorrow. >> yeah, i know. >> what? that i can have a guest. >> you have all the guests. share a bit. >> i do not have all the guests. i'm happy to give you some guests. yeah. i don't have all the guests. >> i don't think you're serious about that. >> i'm not the least bit serious. that was a gratuitous comment, completely untrue. false hyperbole even. >> it was. >> you're not getting a single guest from me. sara ieisen has been trying to take my guests. that 5:00 a.m. show, you try to get them for that. >> jim, one last point on, as we watch cars, outs to outperform. you've been looking for a part of the economy that will see a part that will succeed. >> it helps alcoa, the rails,

rails ship autos. the dealers, autonation one to watch. that got too cheap. this sector has been in the doldrums. it's time for it to move! i may have to get some of the ceos of the autos on. >> yeah. >> we'll be watching. >> good luck with that. >> they'll come on. >> i know they will. >> they'll come on my show. >> i know they will. >> "mad money" 6:00 p.m. eastern time. >> "mad money," bro. >> where all the good guests are. when we come back, ism and a conversation with go pro ceo nick woodman. this just got interesting. why pause to take a pill? or stop to find a bathroom? cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure.

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>> good tuesday morning. welcome back to "squawk on the street," i'm carl quintanilla with sara eisen, simon hobbs, david faber live at post nine of the new york stock exchange. dow up 100 points. a lot going on. dudley with dovish comments. we kick off the month of march, super tuesday, apple on the hill. auto sales have been a nice surprise all morning long. ford and autonation some of the best performers.

though gm, relative to its competit competitors, underperforming. meantime we'll get continued breaking news. ism here, construction spending. for that we get over to rick santelli at the cme. rick? >> thanks, carl. there's a bit of creep going on to the upside on rates. we talked about how bunds were creeping up after yesterday's buying pushed rates down. we have january construction spending out momentarily. expecting up 0.3%. also february read on ism coming in at 49.5. better than expected, but it now makes the run of under 50 five in a row. haven't seen this type of sub-50 activity in ism since 2009. if we look at prices paid, they were 38.5. sounds low? it is low. but not as low as the last look of 33.5. just like 49.5 headline is above

48.2, wesequentially. we are seeing employment data this week. the employment index moved up from 45.9, i believe it was, to 48.5. still sub-50. here we go on construction spending for january. up 1.5. that's a big beat, five times what we were looking for. and the last time it was this strong, you have go back to may of last year and even last month's 0.1 was upgraded to 0.6. ism better than expected, but that's still a low bar, sub-50 on key components and headlines. >> the market is taking it, a mini pop in stocks. it is super tuesday, the biggest delegate prize is texas. it could be a make or break moment for ted cruz as he battles donald trump. our hampton pearson is live in

houston with the latest on the texas math. good morning. >> reporter: hi, sara, they expect a texas-sized record turnout on the republican side. we're in river oaks, where in about an hour ted cruz is expected to come here and cast his ballot. it's our second polling stop. what we've seen so far, even before the polls opened and they barely have been open two hours, people were waiting outside to get in. this particular polling place, which is mixed, where there are both republicans and democrats voting, they have been busy right from the get go. republicans outnumbering the democrat voters here by about 8/1. this is really make or break for ted cruz. he has to win texas to try and stay viable and in hopes of going -- knocking off marco rubio and going one-on-one with donald trump. that was his message at his closing rally last night here in

houston. cruz telling his followers he needs a win here in texas to really send him on his way. >> if donald trump is the nominee, hilly likely wins. and our company is the only campaign that has beaten and can beat donald trump. >> reporter: of course, texes is the biggest delicate prize, 155 delegates up for grab on the republican side, 251 on the democratic side. hillary clinton with a comfortable lead there. looking forward. we will see later on today if the first leg in the ted cruz strategy at least plays itself out and he's able to win. he's ahead in all the polls here by double digits in at least one poll. >> hampton, thanks. if by tomorrow -- if by tomorrow the race for the white house does start to clarify into two main candidates, that may be

the point at which the markets start to pay closer attention. let's get some analysis. tracy mcmillan is from wells fargo investment institute. dan clifton also joins us. dan, you have done some work on this. let's say it's clinton/trump. let's make that working assumption for the purposes of this discussion. you have interesting analysis as to what each in essence would bring to the table. hillary clinton really leaving the market much more focused on monetary policy. talk us through it if you would. >> the two parties, their views are very different. hillary clinton's proposing to raise taxes, slightly more government spending. that means that we have a continuation of the obama policies, focused on monetary policy stimulus, less on fiscal policy stimulus. if you go to the republicans, you see all five of the major

republican candidates have a large corporate tax reform plan. they are telling you they would rather have fiscal policy be the main lever of economic growth rather than monetary policy. much of that would be rewarded by equity markets if they could get them through. >> in the case of trump, increase in defense, homeland security, which is deficit spending. despite the fact it's coming from the gop, you have a boost to the economy there. >> that's correct. the corporate tax reform is supply side. the government spending, you will see higher deaf kits as a result of that and higher interest rates, all else eke cal if the trump plan got through t. >> you believe the markets are at a disadvantage, large cap and domestic stocks do better when

you have an incumbent president looking for re-election, presumably because of less uncertainty. >> that's our assumption. we saw this chart from strategist research that shows in open election years the markets tend to be more volatile. in election years where we have a candidate for re-election, those markets tend to go up more consistently. >> have you been able to break down each of those policy platforms yet? >> are you in position to comment further on what you think the market might do? >> what we think is that the uncertainty that is contributing to the market volatility this year is from multiple sources, of course. the fed action, china's actions, and also the uncertainty we're seeing within the election is contributing, we think, to some of the volatility we've seen so far this year. >> interesting. in the meantime, dan, you would pick up two parts of the trump

agenda that might worry the market. >> yeah. that's right. so, the first is geopolitics. most of the concern that we hear from investors are investors who are involved in foreign markets. very worried about protectionism and very worried about possible war with china itself. now, i think some of those fears are overdone somewhat. we are going to see less expansion of trade deals. and that hurts u.s. multinational companies relative to other companies. so, in a way that i would think about it, small cap stocks would be doing better that have more of a domestic focus under a trump presidency. i don't think a war is likely, but you will see early geopolitical tests in 2017 regardless of who the next president is as other countries see what the resolve of the next u.s. president is. dan, just a purely political question here, outside of the world of economics and investment. one of the political headlines this morning, is trump ready for prime time. what everybody is wondering, this is a crowded primary,

unusual, crazy. >> yeah. >> will the trump playbook actually work in a general election? what are the knnuances between e primary contest and the general election. >> if you look at the republican primary, they throw a lot at you. corporate bankruptcies, trump university, a lot of that has not stuck. in a general election anot lot those ads stick. i would expect to see people who got fired because of trump's corporate bankruptcies talking about how they were hurt by him as a cooperate leader. i think the flow of the general election will be much more different than the primary election was. regardless, this will be a close election. we're 50/50 country. open elections generally are about 53/47 in the most extreme cases. this is likely to be a 551-49 race. >> this is the beginning of a

huge number of conversations particularly on this channel as we go through the process. as far as asset allocation is concern what should people be think being doing? what's the hot area of thought, if you'd like? >> yes. so we would suggest that investors continue to invest in bonds and stocks and potentially some investments also in real assets such as real estate in order to diversify that portfolio and smooth some of the volatility that we expect to be happening this year. >> okay. let's leave it there. tracie mcmillan and dan clifton, thank you both. when we come back, gopro falling 50% below the ipo price in the last few months. will the company's acquisition of two editing start-ups shake things up? nick woodman will join us. construction spending posts the biggest gain in eight months. back in a minute.

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commercial and investment bank in london and new york. as part of this reorganization, the bank will sell down its stake in barclays africa, 44,000 employees in that unit. once thought to be a cornerstone of growth for the company. that's a big ticket item for the bank. also this surprise cut to the dividend. they will be halving the dividend in 2016 and 2017. that was a surprise to many investors, but the ceo saying painful but necessary as the bank takes charges as a result of selling off non-core businesses. staley is former head of banking at jpmorgan chase, and he said barclays is a global investment bank but acknowledged the investment bank is the home to tens of billions of dollars in fines due to misconduct. we discussed many macro topics but staley pledged his commitment to restore the integrity to barclays, put an

end to these fines and shore up confidence in the european banks. >> if this bank fails or causes a recession, you pay for that under new law for reckless misconduct. you could go to jail for that. is that something you think about? >> sure. sure. i think those who have the authority to manage these large banks need to take -- need to be accountable for what happens. i think banks are in a much safer place today than they were going into the crisis. by one calculation the bank of england, the british banks are capitalized ten times higher than they were going into the financial crisis. we are capital much stronger, the liquidity profile of the bank is much better what we've done in terms of investing, compliance, in audit, in legal, to make sure this bank does the right thing, if we do trip, we catch it early. we mitigate what goes on.

so much focus on not repeating what happened in 2008 and 2009. i'm comfortable taking the liability and assuming the obligations that a ceo of a large bank has like barclays. >> despite how much capital all the banks have built, the top four banks in the uk are nearly 300% of gdp. how much do you need to shrink before the systemic risk goes away? >> you know, it's very much a question of where that risk is and how you calculate that risk. one thing we've been supportive of is creating the ring fence banking industry inside the uk. the bank of england does rigorous stress testing now. thousand these banks are managed as a capital manner, liquidity manner and organizational manner is so much safer than in 2007 and 2008. >> do you have a contingency plan on if britain leaves the

european union? >> we have come out and stated we think staying part of the european union is the best thing for barklclays customers and corporate customers in the uk. we will be affected if our corporate clients and retail clients are affectsed. so our intention and belief is that we stay within the european union. >> what would the economic effect be just beyond a simple dev de-valueiation of the pond? >> that's very difficult to determine. i don't think it would have a deleterious impact in a significant way on barklclays business or balance sheet. >> you are still dependent on what the ecb decides to do. you have operations across europe. they meet next week.

what more can ecb do to instill confidence in the market? do they have any tools left? >> obviously we're in uncharted territory in terms of monetary policy. the monetary combination that's going on since the financial crisis has been extraextraordin. we tried to get a global economy moving through an aggressive monetary policy. as some countries talked about negative interest rates, we're in unchattered territory. i believe the government needs to do the fiscal side of the equation. it can't solely be done on the monetary side. >> he said that despite negative interest rates and the move towards further negative interest rates, barclays margins have remained intact and it will be solving bank specific issues like culture and legal issues that will help the bank return to growth. not anything the central banks can do. more from jes staley, the ceo of

barclays on the next hour. >> obviously in the new world in which they live they have to re-fence off the uk bank, he said it is short cited for people to exit investment banking. was that inevitable when he was appointed given that he ran jpmorgan's investment bank for so many years? is that an active decision they made there? >> i think it was inevitable. but he firmly believes and the board supports his view that i te investment banking is an important counter cyclical. he said in 2008 when investment banking dropped off, the consumer bank stayed afloat. in 2009, when the investment bank roared back, the consumer bank was there. they have to undergo the fed stress test in 2018.

that's another challenge to operating in the u.s. they will very soon have to abide by the fed's rules, too. >> kayla, thank you for bringing us the interview. enjoy the pound at 1.39 over there. we'll see you soon. kayla tausche from london. >> when we come back a live and exclusive interview with the ceo of gopro, nick woodman.

struggling with a sinking stock price and falling revenue prices, gopro looking to make changes. announcing plans to buy two mobile individual editing apps. gopro's nick woodland joins josh this morning for an exclusive interview. >> nick, chathanks for joining . >> thank you for having me. >> you buy these two software companies, walk me through the strategy and how that will improve the gopro user experience. >> we just announced we're in the process of acquiring supplies and replay. we acquired them to accelerate our vision of people engaging

and sharing content. the mobile platform, smartphone and tablet, are the best and most convenient applications for editing. we're opening gopro up not just to gopro customers but billions of smartphone customers around the world to create and share content with smartphone users. >> do you see that giving a boost to camera sales? >> absolutely. if gopro can become a standard for how people share great stories, then we think he can with upsell people to capture devices, our cameras. if we can extend gopro as a solution for even nongopro customers, we can make go pro more relevant to people around the world. >> let me -- let's talk about that product pipeline. we're waiting for that gopro drone. i heard some people say, listen, there's a lot of players in the

space. they mention dji, a company great products, brand awareness, $10 billion valuation. why should investors believe, nick, that gopro can come in, compete and win as a dronemaker? >> the drone space is very, very early days. there's a lot of opportunity, dji has a particular focus, we have a particular perspective at gopro, we're building products for maybe a different type of customer. we think we got 12 million, 15 million customers around the world looking for something in particular from gopro. we think we have a terrific differentiated drone for them. >> how should your investors think about the drone? should they think about it, a product that will be able to scale as quickly as the cameras? >> we think that the drone category is a subset of the overall gopro market today. we're very much focused on helping people capture and share great content. and that needs to be easy.

and a gopro so far is the easiest way to self-document and share your life experiences. drones are exciting because they enable perspectives that have never been possible before. but they're more expensive. a bit more complicated and there's a learning curve. we think we're early in that market opportunity. but we're extremely well positioned to succeed because we've established the activity capture category. we think that drone is an extension of that. >> when i talk to financial analysts who cover gopro, they say they admire woodman's enthusiasm and his passion. but they also say here's a young guy, he's made a ton of money, now he has this company that's facing real challenges, stock is down 70% in 12 months. they wonder if you're still committed to running this company long-term. what's your answer to that? >> absolutely committed to running gopro long-term. gopro is very much an extension of everything i'm interested in in life, technology, adventure,

video, photography, family. gopro has massively enhanced my own life experience and documenting my family experience and development of my three boys. and i think that, you know, life is about pursuing your passions, interests and doing what you love. i'm fortunate that i get to express myself through gopro and work with some of the most talented people in the world, whether they're product designers or people in the marketing department. and i couldn't ask for a better job. so this is what i'm doing for the long haul. >> when i was at gopro when the company ipo'd, i was there in san mateo that day. so much confidence and enthusiasm. there's been changes at gopro. walk me through what the moral is like at the company. >> we have such a strong vision of the future. a strong product road map. 2016 is the single most exciting

new year we've had at gopro whether it's hard wash, software, entertainment products, this is the biggest year ever forgo pro. when you're on the inside and you have access to everything that we're working on, it's very easy to stay excited, very easy to stay motivated, and it's going to be an exciting year for us. >> nick woodman, thank you for your time. >> thanks, josh. >> carl, back to you guys in new york. >> okay. thank you very much, josh lipton. straight ahead, apple and the fbi about to testify before congress. tim cook's team won an important test case last night, not to open an iphone. what you should be watching for now when we come back. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings.

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i'm sharon epperson, here is your cnbc news update. in his handwritten will, osama bin laden claimed he had about $29 million in personal wealth. the bulk of which he wanted to be used on jihad. the will was released in a batch of more than 100 documents seized in the may 2011 raid that killed the al qaeda leader at his compound in pakistan. democratic presidential hopeful bernie sanders casting his ballot in the vermont primary, arriving with his wife, jane, in burlington about 30 minutes after the polls opened. vermont is one of 12 states holding primaries or caucuses today. some wild video here of a driver plowing his car into a gas pump in arlington, texas. the driver's franticly trying to

free other passengers from the car before flames from the gas pump get more intense. firefighters got the flames under control in about two hours. a big night for l.a. clippers owner steve ballmer. during half time of the clippers/nets game, the 59-year-old billionaire wowed the crowd with a monster two-handed dunk. he promised the 19,000 inned attendance they would get a free pair of converse sneakers if he made it. back to you. >> sure. apple and the fbi set to testify on capitol hill in about 2 1/2 hours. today's hearing could go a long way in deciding how cases in over encrypted devices like this will be handled in the future. robert herjavec is "shark tank" host and joins us from san francisco. good morning to you. >> good morning. >> a lot of discussion about what it would mean for tech startups and the way they even pitch investors, raise money if the government wins.

what are your thoughts on that? >> i think in many ways we don't even exist as human beings anymore, we're just datapoints. privacy is integral to technology, especially cybersecurity. the government's trying to use old laws against new technology. it just is a matter of the law needs to be updated. i don't think it should be pervasive throughout. nobody should be allowed to have that level of access to our devices. >> how much more skeptical would be about a startup that dealt in data if the government won and then later if that start up came to you for investment. what would your first question be? >> well, you know, the first thing is we all have to play within the rules. if the legislation is going to change, it's got to get updated to keep up with new technology and encryption. it's a complicated technical issue. as an investor, i would invest as long as i knew what rules are. that's the problem. it's a bit of quick stand. >> you delivered a keynote this

week about cloud security. how much of this is being talked about where you are? what are they saying? >> this is the number one thing. i was on a panel on cloud security yesterday. all everybody wanted to talk about is apple versus fbi. microsoft, google, everybody. this is a hot case in the technology world. this is the number one thing. it's privacy, it's encryption. it's who we are online. i think this case will fundamentally change what we look like online. >> one thing folks may be talking about today, robert, it's super tuesday. here at cnbc we're trying to figure out the business and economic ramifications of the election. as a representative of small business, if donald trump were to be candidate of the republican party, would that be a good thing for business and the economy, the fact he built himself a fortune? should he be running the country. >> it's interesting. i'm a canadian, so i can't actually vote in the election, but i have to tell you, outside

of the united states, the most curious thing about america right now is donald trump. in many ways the rest of the world can't believe we're here. the guy is a great business guy. i met him. i know him. there's no denying he built an incredible brand and a great business and he understands small business. but what we learned in 2008 is we need somebody in office that understands government and business. it's a combination. >> i would also add immigration to that which is an issue that's near and dear to your heart. >> don't get me started on immigration. this is the one area where i really disagree with donald trump. i'm an immigrant. i came to canada when i was 8 years old, we escaped communism. if we had the kind of laws in place that donald trump wants to put in, i would never be sitting here. i would have never been given the opportunity. america is still the greatest country in the world. let people in. we have to screen them, we have

to make sure there's no terrorism or threat, but open our borders. that's how we'll become greater. that's how america will dominate the world again. >> is it your sense that -- we've been talking about enterprise spending and questioning the strength and durability of enterprise spending for the past quarter or so. is it your sense that companies are holding back because they're not sure exactly how that is going to go down in november? >> well, what we know in every election year is that before the election things kind of stabilize. my sense is enterprises are not stopping spending, but they're seeing what will happen. i think the economy is still strong. the markets are in a very weird state of flux, but the markets are strong. people are spending, corporations are increasing. the economy is in a good place. >> robert, can i ask you a question about technology and how far we've gotten? the word from apple or generally

from the press is that this discussion with the fbi will become obsolete quite quickly because apple will generate and others will generate encryption of devices which is unimpenetrable. so this debate won't arize in the future. they won't be able to create software that gets in. where does that leave you as somebody who protects corporations, clouds, as i understand it? will the corporations be able to a far greater extent be able to prevent hackers as they've broken through in the past if at the consumer level tim cook and alcoa are doing what they're doing. >> the one thing we know about the technology world is that it changes faster than any other industry. there's no such thing as encryption that cannot be broken. it's only encryption that cannot be broken today. somebody in their basement will break it. for sure. as sure as the sun comes up tomorrow. we're moving into identity. it's not about encryption, it's about proving i am who i am

online. you're seeing new products from microsoft and google that know who i am. facial r facial recognition, how i hit a key stroke. we're moving into an area where identity will be more important than encryption. >> appreciate your time on a busy week for you. robert herjavec joining us talking about everything from super tuesday to apple to fbi. still ahead, congressman jim jordan will join us. he'll be at the hearing this afternoon with apple and the fbi. he'll join "squawk alley" later. find out what he wants to hear from both sides. and look at the markets. we are in positive territory, up 192 points on the dow. [vet] two yearly physicals down.

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welcome back to "squawk on the street." financials starting this month off on a strong note up by a percent or so so far today. this after lagging the most in february and turning in the third straight negative month of performance. financials this year's worst performing sector overall down more than 10%. today the sector is pushed higher by names like northern trust, legg mason, morgan stanley, state street all up 3% to 4%. simon, financials beaten up very badly in the first part of this year. we'll see if it turns around for the month of march. >> ways to go to catch up. let's send it over to chicago and rick santelli with the dow up 189. rick? >> thanks, simon. i would like to welcome my guest toast, chip dixon. thanks for taking the time. >> rick, thanks a lot. >> chip, i call our economy the

"buzz lightyear" economy. we have subpar growth to infinity and beyond. do you disagree with that? >> no, i call it the l low velocity economy. the low velocity is not sufficient to generate jobs, income growth and opportunity. the participation rate is more important than the unemployment rate and it remains too low. >> it's funny you mention that the fed never mentioned that. you talk to people that trade the auto stocks. if they're long, they want to talk to what phil lebeau talks about, record auto sales. but record auto sales, been there done that, doesn't make the stock go up. i look at the fact that the participation rate kind of muddies or covers up the negatives of employment. everything that the economy is doing, it's been doing and most likely will continue to do. this puts the fed in a bind, doesn't it? >> sure it does. it makes it hard for them to get

rates back up. the level of government debt makes it hard for them to get rates back up. makes it hard for savers to get an adequate return. you need to flip from monetary solutions to fiscal solutions. we are not offering them right now. >> but whether it's apple versus the fbi or in this instance, fiscal verse monetary, the fact that policy has set a pick, to use a basketball term, for congress' inactivity, i don't see congress' inactivity changing any time soon. we're in an election year. it's either more of the same from the fed and experimenting or we wait another year before you get new politicians to try to dig in if they're meant to do that your thought? >> you get more of the same and this is the year where we wait because we're in an election year because we won't know what changes will be made until next year. >> my final thought is, i coined a term. we heard of jobless recoveries.

is this going to be a jobful recession? sticking with the theme. i listen to dudley's comments, but i look at it like, okay, we're currently 1.9% 2015 growth. probably a smidge better first quarter is any indication of this year. with the globe pushing our growth down, maybe it will lower the grid palide path. if we don't go into recession, should the fed keep normalizing? >> i don't think they will keep normalizing, because our rates are so much higher than other companies, the dollar will go up. you will see decent job growth, but not sufficient to push the participation rate up. that's important. >> so basically you're looking at it from my new category, policy contagion. in the end, it almost doesn't matter what the fundamentals are, what matters is who is doing the most. if all stimulus is fundable, all

bad policy is fundable as well. >> we need go to more stimulative or constructive growth fiscal policies, we need do things that begin to reduce debt levels and allow the consumers and other people to have a lot more -- to be able to participate a lot more in the economy. thank you. >> chip, thanks. sounds to me like regs is the first thing i would attack to get to your final ends you're looking for. >> absolutely. >> sara eisen, back to you. >> rick santelli, thank you very much. with the dow up 193. up next, the ceo of kate spade joins us exclusively on the state of retail and the luxury consumer on the back of posting better results. craig leavitt when "squawk on the street" comes right back.

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let's send it over to dom chu. >> another spot in the market here. shares of casino operating rising on the signs that the casino slump in macau may be bottoming out. sales unchanged from a year ago compared to a forecast of 2% to 10% drop, shares of wynn, sands, mgm up 3%. sara, maybe a little viva macau and not las vegas. shares of kate spade higher after the company missed on total revenue but beat on same-store sales estimates. joining us is jasthe ceo. what are you doing to get double digit sales numbers in a tough retail and apparel environment. >> those are industry leading comps. we've accomplished those great

comps alongside of another effort that we have, which is our quality of sale efforts, which is to really focus the consumer on purchasing our product at full price. to accomplish those two things along and at the same time frame was >> emotional product. especially to our novelty product which is really a point of differentiation for us. a lot of emotion attached to it. those things performed well. >> like what? >> we had a little collaboration with magnolia cupcakes and we had a magnolia cupcake bag which was extremely well received. those things always do well for us and help us with our story telling. >> some of the analysts are writing that the outlook is a little disappointing as far as

2016. were you being conservative because of the economic environment or is this about expanding the footprint of stores? >> strongs our results were we did see head winds as relates to the international consumer traveling and associated fx pressures. impacting us in the outlet channel where there's more tourist dependent stores impacted by that and we certainly put that dynamic into our plans for 2016. that said we're at the midpoint of our guidance talking about a 15% growth. low to mid teens in terms of our comps. we're very bullish about what 2016 and beyond looks like for us. >> there's this idea and sounds like you might agree with it that luxury spending globally may have peaked. >> i'll tell you what we can control and what we can control is things that are points of

differentiation of our product. we can control how we build strong engagement. we building a global multichannel life style brand and that lifestyle piece which relates to, in particular, adding a number of new categories to present a lifestyle brand has been important for us in two ways. one an important customer acquisition vehicle so we're finding from 30 to as much as 50% of the purchases into these new categories are completely new to the brand. never purchased anything from us before and even more important is that we're finding that it's quite sticky so we're seeing that they're coming back. those consumers that are first purchasers into the new categories and buying from us a second time in our core categories. they give us a great deal of confidence about what our growth can look like. >> the point here is there's too many handbags on sale in the industry. that's your daily struggle, isn't it? and you coming off of a low comp here. last year is not great for you which is why the figures are as

strong as they are this year. you dropped a couple of brands. >> our comparatives for 2014 are extremely strong. we saw 28% comps in 2014. so actually it was a very tough comp that we're up against and still delivered the 14% results. >> i'm wondering if there's still too many handbags in the industry. >> it's about having different products. it's how we build market share and we're continuing to gain market share quarter after quarter and it's by delivering emotionally differentiated product. >> it's an interesting strategy when it comes to expansion. what you seem to be doing is growing the number of categories. going into home and baby and mens instead of making sure that everyone in the world has a handbag. >> to build the strongest engagement we have to be a part of her entire life so we're seeing this as a vehicle to build stronger engagement because she's buying more and

more categories and to acquire new customers because in the end we still have as much as we have grown a relatively small market share so customer acquisition is critical to our growth. >> what about the idea that women were buying cheaper handbags? do you chase that as well? do you chase the price points down? >> we have a strategy that we call shoulder pricing strategy which is a very successful tool for us so we make sure that we have the opening accessible price points to bring new customers in but we were always balancing that with the splurge customer so that we're maintaining steadily aurs to make sure that we are continuing with that emotional attachment to the customer at the higher end but also having access points to new customers. >> how much is the pain that we're seeing across department stores hurting you? >> it's not. we are -- there's no question that there's challenges in that channel, our wholesale business

grew. we are pleased and we're seeing a shuffling of brands in the department store floors but that is actually benefitting us and our market share is growing. >> another area is mens. you still have jack spade. >> it's a significant potential and it's one of our four category pillars and we're actually very excited about how they are brought the men's pillar closer in line with the kate spade new york consumer and that's a way to broaden that customer base and round that out into a lifestyle brand. we added new categories in 2015 and more to come in that regard. >> no chance of getting the man bag going again. >> you should bring it back. >> and it doesn't really suit me but thank you. >> it's not on the horizon. >> just checking. >> i've heard you be very positive here and the stock has responded this year but overall your stock has not performed particularly well over the last

couple of years. what is the stock market missing? all i've heard is positive things about your business. >> what we can control is making sure that we have product that resinates. that we have a strong strategy about long-term sustainable growth. this is not about as much as we can in the next quarter. this is about a long-term sustainable growth strategy and making sure that we deliver on the guidance that we provide. that's what we're doing. >> do you think wall street is comparing you too much from the coaches of the world. >> we make sure that we're differentiated in the marketplace in terms of how we str stratagize as well as the product offering. >> it's time for john fort with a look at what's coming up on squawk alley. >> good morning. look at these markets. all the major indices near session highs. up 8.5% after earnings. is this the growth stock?

also apple, their lead counsel is going to give some testimony. we have some insight into what he's going to say before the q and a. won't want to miss that. also super tuesday. clinton, trump looking to pull away from the pack. is it time for investors to zero in on their policies? all that and more coming up on squawk alley. (patrick 1) what's it like to be the boss of you? (patrick 2) pretty great. (patrick 1) how about a 10% raise? (patrick 2) how about 20? (patrick 1) how about done? (patrick 2) that's the kind of control i like...

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good morning, it is 11:00 a.m. in california. it's 11:00 a.m. on wall street and squawk alley is live. ♪ good tuesday morning. kayla is live in london where she just spoke to the ceo of barclays. she'll join us later with highlights. meanwhile, john fort and myself. and