suspending their partnerships. it's tuesday, march 8th, 2016, michigan night, and "squawk box" starts right now. good morning, everyone. welcome to "squawk box" here on cnbc. i'm becky quick along with joe kernen and scott wapner. andrew is off today. after five days in a row of gains, you are seeing the markets give back some today. dow futures are down triple digits. a decline of about 128 points below fair value. s&p futures look like they would open down by about 17 points. the nasdaq would open off by close to 45. overseas in europe, you can see in the early trading some similar moves with the dax down by about 1.5%. the cac is off by 1.6%. the ftse by 0.9%. the nikkei and hang seng were

both down by 0.75%. china's february exports dropped by more than 35% in u.s. dollar terms. imports there fell by nearly 14%. of course, we're watching oil prices today too. crude was up by 5. 5% yesterday. it's up 45% from february's low. right now it's down by 1%, but wti still sitting above 37.50. scott? >> all right. speaking of oil, the goldman sachs commodities team out with a new report today. that title, "the three rs." the goldman team suggests those factors have driven a prema chur surge in commodity prices that is not sustainable. the firm is maintaining its bearish view on gold. it keeps its near-term copper price target of $4500. as for iron ore, goldman predicts a rally will likely prove temporary, so it's maintaining its end of year target of 35.

and on oil, goldman's near-term view is for a trendless market with substantial volatility between $40 per barrel and $20 a barrel. that firm has a bullish end of year view on energy, saying oil will likely rebalance this year and create a deaf it market by year end, but goldman cautions a so-called green shoot of a deficit alone is not sustainable for a market. we're going to talk with commodities king dennis gartman at the top of next hour. >> i wonder what all that means in light of equity markets. once again, fair is foul and foul is fair. is oil going up good or bad for the stock market? do we want commodities to bounce? do we worry about inflation? >> probably want some stability. >> but they said probably stale volatile. i think since friday, since that great job number we had, markets struggled to close higher on friday, but they did. yesterday struggled to close

higher. the nasdaq did. i'm starting to feel like now that we're -- it's the first time we've had 100% likelihood. oh, no, we could double interest rates at some point this year. we could go up another quarter point to half a percent. but these traders, they're like, oh, no, the fed might act. the pausing cycle on the tightening phase that we've been in, this horrific tightening phase. >> but you have to put it in context with the ecb. it's relative to the rest of the world. >> unfortunately, we've imported their lousy economic system in europe, which is causing negative rates. they may never grow again. for a myriad of reasons.

suddenly now we can't because the dollar gets stronger. we can't do what we need to do. they didn't take our ideas of individual freedom and initiative and free markets and private sectors. unfortunately, that didn't export as well. >> the other part of the market story to your point about the f.a.n.g. stocks not doing anything, the reason they haven't gone up is because money has been coming out like an atm going into other areas. the industrials and transports and all sorts of different commodity spaces. that's one of the reasons, along with short covering, that it's really, you know, ripped to the upside. since january 20th, energy is up 17%. i'm sure the f.a.n.g. stocks are flat if not lower. >> does the "n" stand for netflix? because it should. half of the loss in cable has gone to netflix.

yet, there's no barrier to entry for someone else to come and do what netflix does. is it over? >> not programming. >> is that going to double again? it's not that expensive. the market cap is not that big right now. it's not like a disney or our comcast or something. yet, people look at it as the biggest disruptor. >> we're going to have a guest coming up in about 30 minutes or so to talk about that very topic. >> some of those guys think netflix is a second coming. >> i think one of the folks we'll have on the set will raise issues we talked about. no barrier to entry. >> $40 billion. it was going to take over the world. really? >> what happens to the market if you can't get any traction in the f.a.n.g. stocks and the whole commodity boom of the last few weeks or so was all short covering. then that evaporates. no f.a.n.g. you've got the commodity thing. people start selling and taking

profits. >> if we actually are in a tightening cycle, the one area that would benefit from that is the financials. we've been waiting and waiting for financials to actually tick up. >> if they're counting on "fuller house" to double their market cap without the olsen twins twins. stocks to watch today, urban outfitters is set to open at its highest level in nearly five months after the retailer posted better than expected same-store sales. the company's free people brand bolstered those results. jm smucker announcing mark smucker has been named the firm's new ceo. probably not -- they probably didn't go outside to find him, i think. not a lot of smuckers. that's not a common name.

most people would change that. anyway, starting may 1st, mark smucker is going to take over. he's the ceo's nephew. interesting. it's a family company. i love smucker too. did smucker buy a peanut butter company? what investment banker ca eer c with that? they presented that. >> looked like a genius. >> eureka. shake shack posted its biggest intraday plunge in month. results beat estimates, butt company offered a soft sales outlook for the year. >> i think they have their own smuckers peanut butter. >> they do? as long as they make it. it's like doritos and pepsi. mayo and tuna fish. >> yum. according to "the huffington

post," larry page and tim cook attended a secret meeting where the discussion was trying to prevent donald trump from getting the republican nomination. it was hosted on a private island off the coast of georgia where mitch mcconnell, karl rove, and house speaker paul ryan also attended. >> they're not out -- what's that richard brant? it's a bridge that gets there. it's the greatest vacation spot in the world. they're on a secretive private island, no admittance to normal people. no, it's sea island. >> a nice island to go to. >> it's not really private. lots of people live there. >> you're right. we should probably not call it private. >> i go there. it's not that exclusive.

>> voters in four states go to the polls today to pick their presidential candidates. john harwood joins us now with more. >> reporter: morning, becky. today is michigan, mississippi, idaho, hawaii. hawaii, of course, will come in way late. we're grinding our way toward the selection of these two nomine nominees. i want to step back for a minute, look at our nbc news survey monkey tracking polls nationally to get the state of the race. first on the democratic side, you can see hillary clinton has widened her lead over bernie sanders 55-38. indicates she's pulling away from him. this is influencing decisions like mike bloomberg's announcement yesterday that he's not running. his path was only there if bernie sanders was the democratic nominee. he said he would only help donald trump or ted cruz, and he didn't want to do that. he criticized donald trump sharply. now look at the republican race. this is why he's concerned about trump. donald trump has got a

significant lead, not as overwhe overwhelming. he's not at a majority. that is reflected in the polls in michigan. when you have a national race and then you go to a big diverse state, they're going to look pretty similar. the 39/20 is similar to what we see in michigan. the anti-trump forces are still hoping that they can deny him the majority of 1237 delegates he needs to get nominated on the first ballot. they haven't given up yet. but that's going to depend on what happens next week in florida with marco rubio, assuming he stays in the race. there was a cnn report you saw yesterday that he was considering getting out. his aide strongly denied it. but he's behind donald trump in florida. and in ohio, john kasich is behind donald trump as well, although he's trying to use that

last week to make up ground. if kasich and rubio can grab those delegates, it's winner take all at that stage on march 15th. they might be able to deny him. if they can't, this thing will be over next week. >> interesting piece in the journal. journal has been playing the establishment, been wearing that hat for a whale with trump. i still like reading everything. it is realistic. they point out that 35%, 40% is not a majority. i understand that. >> that is true. >> but let's say you just saw that national poll again. if you continue to win 39% every time there's a caucus or primary, if you're at 39, your delegates are going to add up to a majority, right? some of them are winner take all. you're going to get those. you're going to get a higher percentage, even at 39, you're still going to get more delegates. if trump was to stay at 39, he'd

go above 12 whatever it is. 1237. i don't understand the path to blocking that. i don't know. >> tons of people have done the math. the question is when you look at the delegates in the bank already for the non-trump people, can they bank enough going forward to have over 50% against him. if you had proportional selection and you won 39% all the way through, you're not going to have a majority by definition. >> really? >> yes. >> what about the winner take all states? >> you didn't let me finish. that's what i was saying. when we flip over on march 15th to winner take all, then the equation suddenly changes. that's why ohio and florida are so important. as we go forward, you know, some of these are winner take all entirely by state. some of them are winner take all by congressional districts, so you have different formulas. if donald trump can keep winning states in that new phase, yes,

he's not going to be able to be stopped. >> real quickly, the idea of what happens to delegates that are pledged to a candidate that drops out, how does that add up? are there any polls that suggest what would happen if rubio actually dropped out of florida? >> i think if rubio dropped out of florida that, would assure donald trump wins that state. he's been leading substantially. marco, the polling indicates, has been coming up, but i don't think there's anyone else who could win that state. in terms of what happens beyond the first ballot, you know, delegates become free agents, and at that point, if you have a sustained deadlock at the convention, then you have the ability of some of those establishment forces, party leaders, business leaders in the state to try to put pressure on. but i wouldn't bank -- i wouldn't bet a lot of money on the prospect for the nomination being snatched from donald trump

at the convention. i just think that becomes very risky when you start offending the rank and file who have delivered primary victories to this candidate, and you're going to go to a convention. the ultimate sort of definition of the party machinations and you're going to take it away. i think donald trump's been warning about that. his allies have been warning about that. i think they would have a lot of ability to resist that. >> john, how bad do you think hillary hurt herself big picture with the comments about being against fracking? states like ohio and pennsylvania. >> well, look, that's a significant industry. the thing she said, she's trying to thread the needle. she does this on everything. bernie sanders said he was outright against fracking. she did not say she was outright against fracking. what she said was, well, i want this, this, and this condition met before fracking can take place. that would diminish some of the fracking. i think what would happen in a

general election is she would start emphasizing how to make fracking safer. you know, you take the other side of the bet that the point. i think when you have states like ohio where an industry has contributed significantly to the economic well being, there's going to be a cost to your opposition. you get some support from environmentalists and sort of core democratic voters, but you alienate some other people. you know, you make your calculation and take your chances. >> we're really late again, john, but cramer picked north carolina all the way. >> in the ncaa? >> if you had to pick one, just pick one right now that wins everything because it's impossible. but who do you think? >> i'm going with xavier. >> are you kidding me? do this with me. do this. can you see me? do this.

i love you. i'm going thursday night. i love you for saying that. >> where's the game? >> big east tournament at msg against either creighton or seton hall, both of which they have split this year. >> the truth is, joe, i've got no idea who's the best team in college basketball. >> i don't either. kansas is good. i watched kansas play. perry ellis. that guy. fashion, game. it's weird his name is perry ellis. you know who else is good? indiana. anyway, thank you, john harwood. we'll see you soon. sorry, drew. drew's been sitting here. you were interested, right? you like politics. >> i like it all. >> march madness. >> it's fun.

>> it is march too. it's march now. i forgot that. is it 2016? five-day winning streak for the dow and s&p. it could be in jeopardy. i think it's because, oh, my god, they might go up another quarter at some point before eternity. futures points to a lower opening. joining us now is rich steinberg, president and chief investment officer of steinberg global asset management, and drew mattis, deputy chief u.s. economist at ubs. drew, now we're at 100% for a raise at some point, even though we thought it was going to be four. that sort of went off the table to maybe people thought zero. now getting back to maybe another quarter point bit end of the year. is that threatening? >> it shouldn't be threatening to anyone. they need to get it up. in our view, it has been and continues to be a couple rate hikes will help things. certainly not going to hurt

things. >> truer words were never spoken. maybe, just maybe, if rates were a little more normal, people would act more normal. >> rich, we should not be basing the stock market on -- whether it's a quarter point or half a point, should we? maybe corporate profits go up some day. we got 4.9% unemployment. aren't things good? shouldn't this be enough to put some support on the market so we can get it up a little bit higher? >> i think as long as we understand the trajectory of that increase, i agree. the ten year is only at 1.8. even if we get back to 2.25, 2, that's equal to the yield on the s&p. i think it would give us a background to stop a lot of the crazy volatility that's

occurring because traders in the short run have hijacked this market. you're seeing moves in crude or in equity prices, other commodities that could be the move of a year happening in a day or two. so i think this cheat money, low interest rate environment is not healthy, and until we get a baton handoff from the short-term volatility traders back to long-term investors, the fed has to start to move. but they're going to do it very gingerly for sure because they'll use the data dependent excuse for the rest of the year. we only see one bump. >> one more. drew, i can't remember your later -- you know, you're always fairly sure. did you think it was a mistake to keep going up with rates or inflation is not at a point where we need to -- i mean, we might as well just stay on hold as long as inflation doesn't come back? aren't there signs inflation is not as quiet as we thought?

>> look, if you look at the narrative, get rid of the narrative everyone has out there about rates going up. just look at what the fed should be looking at. the unemployment rate is at 4.9. inflation measures are at or above where the fed thought they would be at the end of this year. if they hold true to what their old forecasts were and say, hey, if we were going to hit these forecasts, we should have four rate hikes, then they should hike rates at the march meeting. they're not going to, but they should. >> and they're not going to because of the dollar? >> who know what is they think anymore. i've given up trying to figure out why janet yellen does anything. but it seems pretty clear to me they're afraid they would upset markets because no one is anticipating it. >> so if they should and they don't, aren't there negative consequences? or there are never any negative consequences. >> if i was a fed official and the balance sheet was at $4 trillion and the unemployment

rate was below 5% and dropping and inflation was approaching where i thought it should be and rising, i would think i would raise rates at that point. >> but you're up able to. >> i don't get to make that call. >> all right. rich, what about just revenue growth in this country. negative interest rates in europe. how is just the backdrop of business activity? car sales seem to be slowing. we're still in the best place around, right, in this country? >> we're the cleanest shirt in the dirty laundry. as we look over the rest of the year, we're going to go through fits and starts in the economy, and we're going to go through fits and starts in the market. earnings are coming down, and the only way we're going to start to get revenue growth is if we get some solidify kags by consumers that things are going to be better down the road than they are now. oil prices have come back up, but consumers weren't spending

that savings before. for a while, they were on restaurants, but the last data i saw from some surveys showed that savings rates were going back up. i think as we go into the election and the election circus that we're watching, it's hard for businesses to start to plan until we know who the final people are going into the november elections. i think we're going to go through this trend of volatility, and you can use your cash to pickle your points on names that you like. >> all right. who's going to win florida? what are your friends telling you? you got any republican friends? >> yes, with my republican friends, including myself, everybody is so scared about trump, but they don't know what to do. every day i'm getting a phone call from surveyists saying if you don't vote for trump, who are you going to vote for? the amount of fire power that's trying to get rubio higher doesn't seem like it's holding traction here.

you negotiation a lot of moderate republicans are really scared about trump. >> all right. rich, thank you. drew manus, you don't live in florida. coming up, new data just released paints a gloomy picture for small business. that's bad news for job creation. those details coming up next. and can you explain why you recommend synthetic over cedar? "super food?" is that a real thing? it's a great school, but is it the right one for her? is this really any better than the one you got last year? if we consolidate suppliers, what's the savings there? so should we go with the 467 horsepower? ...or is a 423 enough? good question. you ask a lot of good questions... i think we should move you into our new fund. sure... ok. but are you asking enough about how your wealth is managed? wealth management at charles schwab.

small business optimism hit a two-year low in february according to the national federation of independent businesses monthly outlook. optimism hit 92.9. that's down one point from january's read and below the 42-year average of 98. out of ten index components, six fell and four were flat. plans for spending and hiring weakened as well as growth in real sales volumes. sales trends have fallen over the past few months. expectations for future business conditions remain negative. another point of note here, owners are continuing to report higher wages but aren't raising prices. in fact, more firms reduced prices than raised. government and the economy often give main street reason to pause. this month's report had the political climate continuing to be the second most frequently cited reason for the reluctance to expand. optimism has continued to climb. as we said, this is the worst read that we've gotten in two

years. >> i guess that leads to our expectations of what kind of hiring small businesses would do. >> yeah, absolutely. they're not really looking to hire and expand right now. as we said, the economy and political concerns are really giving them reason for pause right now. i think they're kind of in a wait-and-see mode to see who the nominees will be on each side. when it came down to a race of donald trump and hillary clinton, donald trump did come in first place with about 60% of the vote for the small business crowd. >> all right. thank you. coming up this morning, buzz stories including details on a poor inspection report from a theranos lab. plus, the hidden value of bromances. why your bros may be the best cure for a stressful situation and a long life, scott. can you move over there and let us -- >> you want a bromance? >> i mean, can we sit together?

>> they didn't tell me that was in the job description this morning. >> scott looks nervous. >> as we head to break, here's a look at yesterday's s&p 500 winners and losers. vo: know you have a dedicated advisor and team who understand where you come from. we didn't really have anything, you know. but, we made do. vo: know you can craft an investment plan as strong as your values. al, how you doing. hey, mr. hamilton. vo: know that together you can establish a meaningful legacy. with the guidance and support of your dedicated pnc wealth management team.

time now for the executive

edge. a report in "the wall street journal" says chesapeake energy's suit against aubrey mcclendon was on the verge of being settled when he died. the suit is separate from the federal indictment on charges he conspired to rig bids on oil and gas leases. mcclendon died in that fiery car crash last wednesday. >> what kind of car was it? >> suv. >> looked like an suv, yeah. >> hit like the -- >> embankment. >> the corner of the embankment. we don't know yet about the speed. >> i think it was a fairly high rate of speed. >> was it 100 miles an hour? >> that we don't know. all this, of course, happens not only with this story and the indictment the day before, but a lot of folks talking about the comeback that aubrey was trying to wage. it's on the front page of "the journal." he even had a conversation through e-mail with steven weiss, on our show, at noon

looking for investment, looking to start a lease bank for new opportunities. so he was trying to stage a comeback right until the end. a federal inspection report found that a theranos laboratory in california ran a blood test on 81 patients despite erratic results from quality control checks. the report has not been released, but it reportedly cites theranos for deficient practices in five categories, including hematology. also, the inspectors said those problems posed immediate jeopardy to patient health and safety. inspectors also found the lab had been conducting tests with expired materials and the lab's quality control manager was unqualified. >> beautiful. >> that's it? >> yeah, that's all. false positives or false negatives? >> i'd rather have the false positive. >> that's no fun because a lot of times you do something about

it. you go in and remove something that doesn't need to be. >> sure beats the heck out of a false negative. >> just in general, you want these things -- i mean, it's important. quality control. >> it's stunning, really, when you think about what's happened to this company over the last 12 months or so. from the cover of "fortune" magazine. >> we're still waiting. the cleveland clinic is going to be running tests and trials, inspections like this. >> they're doing due diligence. he gives them as much support as he can with that. finally, bromances may help mitigate the effects of stress. that's according to a researcher at stanford. research was on rats and found that companionship between male

rats immediately following a stressful situation led to less aggressive and more cooperative behavior. they cuddle and sleep together. they hang out. they, you know -- le they, you know -- let's say we were leo, out there with one horse, would we both get in to keep warm? >> oh, you're thinking of cutting the horse open? >> talking about spooning. there can be physical contact. i don't have a problem with that. i don't know. are you okay with that? >> i'm good with whatever. >> you just don't know what the hell to say. you're a guest on the show. sorkin, i don't know where he'd be right now. >> he may be in the fetal position. >> anyway, when you are substituting on the show, you've got to just be ready for this

type of stuff. where are you on this? there's no sister -- >> i think it's true. you would think after any stressful period if you have someone you can lean on, whether it's female-female, female-male, male-male, you just need that. >> if someone cuts out that sound bite. but what is the name for a female bromance. is it bff or something? >> yeah, bff would work. >> bromance sounds better . it just works. >> we assume some women -- for some reason, and i don't want to get into gender problems, but we assume women have close friends. men are thought of as you need to be more, you know, not show that side. i'm fine with it. >> i thought we were going to do like that sort of awkward icahn/ackman hug. >> yeah, i'm worried about the christie jerry jones deal.

>> remember the one you had with rich bernstein on the set? i was there that day. >> did we hug? >> i'll tweet you a picture. >> okay. >> coming up, netflix keeps its view -- i don't even remember what it said. oh, yeah, keeps its viewer numbers a closely guarded secret. we asked nielsen to crunch the numbers on the new season of "house of cards." they're going to share their data with us next. you're an at&t small business expert? sure am. my staff could use your help staying in touch with customers. at&t can help you stay connected. am i seeing double? no ma'am. our at&t 'buy one get one free' makes it easier for your staff to send appointment reminders to your customers... ...and share promotions on social media? you know it! now i'm seeing dollar signs.

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welcome back. time for the squawk planner. no economic data of note today, but on the earnings calendar, we will hear from -- look at this. we were just talking about this. chevron is holding an analyst meeting today. we'll be looking for comments about the company's dividend and capital spending levels. and a day -- whoa, no way. ihop's national pancake day. what? restaurants are giving away a free short stack to each diner and asking for donations to charity. that is today's squawk planner. they're still around. before my kids were born, at the hospital where they were born,

there was one. >> right there? engel wood? i've been to that one. >> they had never been. we said, you know what -- and we drove to one. you're not going to just be seated immediately. >> no, if you go on a saturday or sunday, it's a long time. did you imagine the line on national pancake day? >> i'm telling you, on the back of the one sheet, just bring it. i don't even have to pick and choose. >> chocolate chip pancakes, blueberry pancakes. >> do you not do this? >> i do. >> okay. >> every now and then. >> do you think about it like i do? just out of the blue, it just comes to you. >> not quite as intensely as you obviously do. are you okay? there's like a tear forming in your eye talking about this. >> this becomes more and more important. >> that's what i was going to say. >> the bromance?

maybe we should go there for breakfast together. >> let's do that. >> over pancakes and sausage. >> this is your read. >> i'm gathering myself so i can read it. >> it's getting awkward. >> getting? where have you been the last 40 minutes? >> the last 20 years. >> well, the new season of "house of cards" premiered to rave reviews, but investors weren't feeling the love. shares of the streaming giant falling 6% on mond. we told you about true optic, a company that measures streaming numbers. we asked them to crunch the numbers for the latest season of "house of cards," which was just released on friday. joining us with the results is the ceo and co-founder. good to have you here. >> great to be back. >> never mind the side show that's going on over here. >> maintained a lot of composure. >> getting it back. so what are the results? what did you find? >> the overall story is that

"house of cards" is probably one of the most hyped shows in television over the last three years, but the audience size really isn't there in terms of considering it a hit. what we saw was over the first 48 hours globally, we saw about a million people stream at least one episode of "house of cards." the average household looked at about 3.2 episodes. if you compare that to, say, "game of thrones," in the first 72 hours, we saw 39 million households. >> what about the first go around of "house of cards"? is it dropping year over year as dramatically? >> we're seeing it pretty flat over the last two years. certain markets have gone up a little bit. certain markets have gone down. overall, it's pretty flat. what's interesting, although "house of cards" is the most hyped show that you think of for netflix, it's not actually even one of the netflix's top five most streamed shows.

overall, in q-4 for 2015, it wasn't even top 200. >> why is that? is that because it's got an audience of elites who are watching this and people who have talked about it? why does it get so overhyped? >> i think it's an amazing show. it's personally one of my favorite shows. so i think it gets hyped because it's amazing. but in terms of the audience, what they actually want, it's not the content people seem to resonate the most to. so obviously there's big hits like "the walking dead," "game of thrones" that do amazingly well both on linear television and streaming, but what we're seeing is what people demand over the top in streaming is very different than what you see. >> i just wonder if in some respects because of what "house of cards" is about, and there have been a million debates on tv and the political talk has been obsessive lately, whether people are just tired of that

specific genre just for the time being. are you saying it makes a larger statement about where netflix is and where it's going in terms of growing subscribers and things like that? >> yeah, i think if you look overall over the last two quarters at the demand for global streaming of content and you see that netflix has five of the top hundred most in demand shows for streaming, it shows they're doing a great job of producing content, but it's still not enough. netflix is still very, very reliant on licensing other people's content in order to drive subscriptions. they quite frankly just don't have enough great content to be able to drive new subscribers as well as maintain audience. >> not to mention competition. >> i need to ask, so "breaking bad" probably the greatest. "homeland," great. "house of cards" is up there with those? >> it's not even in the same

stratosphere. >> just in terms of what you like. i'm looking for something. did you like "sons of anarchy"? >> it's not something i've personally watched. >> what about "the wire"? people say i have to watch that from day one. what's next for me? that's what i want to know. should i do "house of cards"? >> here's what we can say. one of the things that we announced last week was a global partnership with mind sharing group to create microgenregraphs. that lets us look at any particular market, what is the content most likely watched together. so when we look at "house of cards," we're able to see shows that you might not really think like "quantico" was the most linked to people that also streamed "house of cards." . >> what about "narcos"? >> i think it's pretty good. it depends on the type of content. the thing that's amazing about the over the top eco system, which is very different from

what occurred on linear, is the audience has on-demand choices to anything they want. you can watch shows that just aired last night. you can watch shows that are 25 years old. so it gives people more choice. so the data in being able to measure that is more critical than ever. >> everything turned out really well at the end. everybody paired off. thomas got to be butler. carson gets to stay. >> spoiler alert. >> oh, that's right. >> exactly. >> that's right. >> nice job. thanks. >> thanks so much. >> see you soon. when we return, we'll talk about the dow transports. they've surged in the last month, up 11%. we'll talk to a transportation analyst about the winners and losers in the sector right after this. ♪jake reese, "day to feel alive"♪

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

welcome back, everybody. the dow jones transportation index has surged more than 10%. chris, what's happening? this is a huge turnaround for what we were watching at the beginning of the year. >> we have seen a nice bounce here for the group.

i think it's driven by data that's been at least bad if not a little bit better than the fourth quarter. fourth quarter was pretty troubling as we saw in not only industrial and commodity end markets start to slip. january saw a bit of a balance and february sort of continued that. i think we're taking a little bit of the recession risk off the table. >> six weeks ago we talked to analysts who were convinced that it was an industrial recession that was very likely headed over into a full-blown recession for the u.s. how much of that is off the table at this point? >> it is hard to put it -- >> the market seems to be telling us that they don't think it is happening. >> i don't think it is fair. it is hard to put a percentage on it. when we looked at the fourth quarter it was the industrials of the commodities but we also saw some of the consumer facing data. we look at railroad cars as an indicating. we were expecting the industrial weakness and commodity weakness because it made sense given what was going on in the world but

the consumer side should have been okay. as we moved in january we saw a niceup tick in that data by 4% from december. we kind of retraced a lot of the deterioration in the fourth quarter. >> it is amazing. that's the chart we just showed. the transportation average or of once again asserted itself as really a good leading indicator for other things. it really does work. the hard thing for us to understand was when oil was going down, the knee-jerk reaction is it is going to be keeper to move things around. i think it is going to be good. but then you realize a lot of that oil is moved by the rail so that's going to hurt that. i think there was the specter that the reason oil was down was because of demand, not supply. then we worry about the economy, right? that's why you sell transports if oil goes down because you are worried about a recession? >> i think there is some concern about the demand driving the price down certainly. i think we probably miscalculated the halo effect around the energy markets in the u.s. it touches a lot of things

around the industrial complex. that drove a bigger decline in volume than maybe we saw. fuel prices come down. that's great for their cost side but they give a lot of that back, at least transportation companies give a lot of that back in terms of lost revenue through surcharges. >> is it domestic? do we need to worry about the strong dollar with transports? not really. right? you're betting on the united states with the transportation -- >> to some extent. >> shipping show -- yeah. >> there is some of that but i think also our exports do deteriorate. some multi-national industrial companies probably pull back a little bit when they have weakness from fx. there probably is some effect to that. it is largely in more of a domestic place. >> just over a week ago warren buffett was with us talking about burlington northern santa fe. he thinks burlington northern will have a worse year than they had last year. he said part of that is just because of the demand they are

seeing. because things are picking up, we're not talking about a massive increase. >> i think that that's right. when we are looking at our estimates, generally speaking we look for flat to down for a lot of our transportation companies this year. so the operating leverage won't be as negative as it was last year but the volumes are still going to be down. that's why i sort of characterized as a little bit less bad when we think about what's happened in january and february. as it stands right now we are looking for very moderate in some cases down estimates for the entire group including railroads. >> nice bounce. does it turn back down or does it keep going? >> i think data so far has been supportive of keeping it there. if you start to take a little bit of recession risk off the table, they priced that in at the end of last year. >> they were wrong. so they're not always right. we got to go, chris. coming up, voters in michigan, mississippi, idaho and hawaii go to the polls today. we'll get a check on the delegate count and get

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a five-day win streak on the line. weak data from china overnight. goldman sachs warning about the big commodity rebound and optimism on main hits a new two-year low. bloomberg says no to a possible presidential bid. plus, it's primary day in idaho, mississippi, hawaii and michigan. we'll talk decision 2016 with political insiders harold ford and david fromm. and the sports world buzzing this morning.

tennis star maria sharapova fails a drug test, nike suspending their ties with the superstar. that and a big hole in one for a "squawk" favorite. the second hour of "squawk box" begins right now. live from new york where where business never sleeps, this is "squawk box." welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernan along with becky quick and scott wapner. futures right now are indicated to be down not triple digits anymore. earlier that was the case. now down 92 points on the dow. the s&p down about 12. the nasdaq which was weak yesterday down another 30. this would snap a five-day winning streak but not from the nasdaq which was down yesterday with weakness in the f.a.n.g.

stocks, facebook, apple, netflix and google. >> you see what noah blackstein sent it? it is the b.a.r.f. rallies. >> could take that a few ways. market warf the rbarf. 10-year note. i thought it was was coming down a little bit today. it was up 1.9 -- oh, a look at energy first. there is the 10-year note. 1.85 this morning. oil had been on a good run, down fractionally today. among stories making headlines this morning, global markets are under pressure due to new figures from china. the country saw a february

exports drop more than 25% from a year earlier. that's the biggest drop since may of 2009. nike suspending ties with tennis star maria sharapova after she revealed that she had failed a drug test at the australian open. sharapova had been taking a substance for ten years that was recently banned. small business confidence dropped last month. the natural federation of independent business saw its monthly sentiment. index drop in february. the dow and s&p both up over 9% since the lows which were hit earlier this month. dom chu joins us with a look at the biggest winners. >> good morning, joe. just to talk a little bit about the f in barf, to put it in context for you, take a look at the chart here. if you look at what's happened with the s&p 500 since maybe march of last year over the course of this past year we've seen a drop from the record highs of around 15% and then of

course like you said, that big rally that we've seen in just the past couple of weeks ago. as for what's really been driving this particular rally, becky mentioned it earlier. it has been a lot of these commodity heavy stocks. energy stocks in the s&p 500, since the february 11th low, up 14% as a sector overall. very strong gain there. financials up 13%. a real concern for a lot of participants out there that the bank stocks weren't participating. material stocks on the commodity side up 12% as well. as for stock gainers, this peeks to your point. who have been the biggest gainers in the s&p 500? chesapeake energy since those lows has nearly tripped, up 193%. freeport mcmoran, there's the "n" in your bart. up 101%. a doubling there. murphy oil corporation up 67%. the one thing that these three stocks have in common, becky, they are all three among some of the most highly shorted stocks in the s&p 500. the question becomes whether or

not a short covering rally can sustain a longer term upswing for the bulls. these guys here, yes, they're up big. but remember, they were down huge going in to that february low. back over to you guys. >> dom, thank you so much. the goldman sachs commodities team is out with a new report today. it suggests that reflation, reassignment and releveraging have driven a premature surge in commodity prices that's not sustainable over the long term. firm maintains its bearish view on gold. gold surged in 2016 up almost 20% in year and covering around 13-month highs. on oil, goldman's near-term view is between $40 a barrel and $20 a barrel. the firm has a bullish end of year view on energy saying oil will likely rebalance this year and create a deficit market by year end. crude surging more than 40% since the recent bottom that it hit back on february 11th. it was just around $26 then. joining us now to talk

commodities and market moves, dennis gartman, founder, editor the a publisher of "the gartman letter." also james liu, a global market strategist. dennis, we've seen a huge resurgence in the commodities prices. you think this continues? >> i think it depends upon which commodity one is talking about. i think in the energy market i think it is going to be very difficult to push wti crude much above the current levels. $37, i wrote earlier this year that i thought $37 would be a moderate point at which everybody shall be happy, producer shall be happy. you've got one-year forward crude at $45 or so. fraccers will be imminently pleased to be able to produce. they'll be forced to put hedges into place. a lot of old wells that had been capped will come back on stream.

there will be plenty of overhead resistance at these levels so i think it will be difficult to get crude to rally. grains, you might see a rally. cotton is probably going to be under pressure but gold i think wants to continue to move dramatically higher as long as there are expansionary programs in place by the monetary authorities around the world. i don't see that changing in he time soon. so crude is probably going to stop. grains could get stronger. gold i think will get stronger still. >> james, let's talk about the broader market. this is a situation where two camps, one camp thinks we are on the verge of a recession, one camp thinks all of these concerns have been heavily overplayed. where do you come down? >> we come down on the side that we don't think there will be recession in the next 12 months. there are clear recessions in some parts of the economy. in energy, in materials more specifically. but because we don't see that recession over the next 12 months it means that the high-yield spread represents attractive opportunity and we still like the more cyclical

beta driven stocks in the stock market. the dilemma is really this. usually when you're late in the cycle, as we are, valuations are usually very, very expensive. you certainly saw this in the dotcom bubble. valuations are quite cleheap rit now for the stock market. unless you think you can predict the timing of a recession, you can fall back on whether the think the stock market is weak. earnings is the big stumbling point for the market. we talked about this all last year with the energy sector and low commodity prices and the strong dollar. but it doesn't seem to be bottoming as quickly as we had hoped. for the rest of this year you are looking at maybe $120 for earnings. looking 12 months out, maybe $124 in earnings. if those numbers stabilize, for example if the dollar actually depreciates over the next 12 months, that would help support

valuation even further. >> if you are now looking at the fed funds now predicting a rate hike, the dollar can strengthen from here out. >> the dollar column is probably the trick yes, sir column this year. fed fund futures are showing maybe two rate hikes. where a few weeks ago they were showing zero. remember we came into the year expecting four rate hikes from the fed. i think expectations are a bit mixed right now. on top of that, it is a question of whether emerging markets and other global economies can stabilize. if they do show a little more stability for example with the fiscal stimulus news out of china, then that would actually help the dollar depreciate as well. >> does the foundation to the market feel better to you? high yield has improved. the rally in the transports. the rally in commodities. is it justified i guess the move that we've had and is it sustainable in any way? >> i do think that the market was probably oversold in mid-february.

a lot of it is entirely due to sentiment. sentiment sunk way too far and way too fast in the wrong direction. >> ha is it swung back the other way? >> not entirely. we're still below average on sentiment measures but we could get higher on valuations. but it is a question of how much higher especially since earnings are coming down. i think it is easy to get back to par from where we are. 2%, 3%. that's basically noise for the market. probably capped at 5% total hurricane return for the s&p. >> dennis, have you been surprised how quickly oil has bounced back? i can't believe i'm talking $37 as a bounceback. >> i have to admit i am somewhat surprised by the swiftness with which crude oil has bounced back. but i thought $37, again, would be a reasonable point at which everybody would be happy. but the fact that we made it back almost $10, $12 off the low is by anybody's estimation a

swift rally. i doubt that it will hold. we'll see. >> what about the move in copper and iron ore which a lot of people are focusing on -- i know a lot of attention is on oil. obviously. and it should be. but as really important bounces for both of those two groups. >> it is interesting. nobody -- nobody until the past two weeks has written about what's gone on in the iron or e-business. i remember writing about it several months ago that it looked to me like iron ore prices had gotten to a ridiculously low level. and we're due for a rally. i am somewhat surprised how swiftly it's come back. but i'm even more surprised by how swiftly everybody has put it on their radar screen. iron ore is a very important commodity. we need to pay more attention to what's going on. that, plus nickel, plus tin, plus copper, all of those things tell me that the economy of the world might be doing a bit better than most of us had thought only a short while ago.

>> didn't nennis, james, thank both. women return. the race for the white house. after months of speculation, former new york city mayor michael bloomberg confirming he is not running. plus foreign diplomats sounding off about a potential president trump. and later, erin andrews winning a $55 million lawsuit. we'll take a closer look at sports stories that are making headlines both on and off the field. "squawk box" will be right back.

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welcome back to "squawk box." let's check out the futures which are improving. at least they were last time i looked -- 60 on the dow. nine on the s&p. . the nasdaq which was weak yesterday down 23. it is the day when voters in hawaii, which if i was a voter in hawaii, i don't know if i'd go. >> why bother because it is so beautiful? had. >> yeah. exactly. i've got some other stuff to do. idaho. michigan i must just stay at the voting place -- no, it is a nice place. . former new york city mayor michael bloomberg has made it official -- i am, too. . i want some headlines.

neither one of us are running for the white house. we said in independent statements. >> you wouldn't have affected it on either side. >> he had 6% and he's 74 years old. it was never going to -- >> more than john kasich. >> that's right. but hillary was never -- it was really never a question. >> i think he was holding out waiting to see if there was an indictment. >> there still might be. you're worth $37 billion. why do you need this? go to bermuda. here to set the table for today's heated contest, harold ford who -- i wish you would run -- former u.s. congressman -- at least for mayor -- managing director at morgan stanley. david fromm, former economic speech writer for george w. bush and senior editor of "the atlantic." david, i can get you to talk

about hillary and bernie or i can get maryland to talk about trump and cruz and rubio. if i let harold talk about hillary, we'll just get a sales pitch. i don't know what i'm going to get from you, david. is it a little weird that the republican establishment is much more focused on making sure trump isn't elected than hillary? >> the republican establishment is not focusing on making sure trump isn't elected. the republican establishment is focused on its own internal civil war. there are two-thirds of republicans who don't want donald trump. if they could work together there wouldn't be a donald trump candidacy. those internal -- it's those internal rivalries that are strengthening donald trump because effectively he's a lot of people's second choice if only by default. can i ask you this, david?

w who would it be harder to get on board? harding to get trump's people on yord with an establishment candidate or would it be harder for the establishment to get onboard with trump if he is the candidate? >> look, i don't think that term "establishment" helps us very much. >> whatever you want to call it. >> because there isn't one. >> you know what i'm saying. >> but semantics are important because it indicates sort of the inle intellectual problem. we have a class crisis within the republican parties. republicans who have gone to college, who are married who go to church regularly and who have participated in the recovery since 2010 are going one way. they're splitting, if they're more religious they go with cruz, if they're less religious they go with rubio. two-thirds of the party who haven't completed coverage, who vn who haven't participated in the recovery, they're lining up behind donald trump. story of republican politics

since romney's defeat has been the attempt by the more affluent republicans once again to impose a path on their party and this time they have met for the first time with this massive revolt and resistance from their rank and file who say, hey, you are offering us more tax cuts for the wealthiest, more entitlement cuts, more wars abroad and more immigration. we want less immigration, fewer wars, protection of entitlements and we're not too interested in your tax cuts. >> the problem with using the word republican is because there are a lot of democrats who are actually looking at trump as maybe the answer, too. >> i think there is a rebellion against governance, against competence, against at least what we define as competence in politics. but if you look at trump's support, trump enjoys support from up and down the income ladder and up and down the education ladder. there may be a preponderance of people perhaps without a great education and without high

income, but that is a case also on the democratic side. think every 15, 20 years we see these kind of shake-ups. i would argue every four years you see an insurgent candidate, an outsider. happened eight years ago with barack obama. this time around is particularly in the republican party and far less with the democratic party, the outsiders have come in and taken over. both cruz and trump would be considered outsiders. many republicans have said they might be more comfortable with ted cruz. lindsey graham say when you compare to trump. when you add their two votes up, that's 85% of the republican vote dominated by outside candidates who those considered insurgents any other year. presidential politics, every race is about choices. the chose between likely hillary clinton or increasingly looks like donald trump. it will be interesting to see where republicans fall down as well as democrats. i think it will be a dynamic race. it will be polarizing on a certain level but i think demographics would favor the

democrats in that race. at the end of the day the message and whomever is able to speak to middle class anxieties, middle class worries and aspirations, as it is in every presidential race i think has the best chance of winning. >> david, is trump doomed to fail if the other two-thirds you just talked about find him just unpalatable? >> on the contrary. as the other two-thirds find each other more palatable than they find him, donald trump will slip up the middle. we just had a report yesterday that marco rubio super pacs have to date spend $44 million. jeb bush's super pac spent something like -- not all of the money they raised has been spent. but say in excess of $100 million. throw in what kasich and cruz have raised you're reaching over $200 million that have spent by the candidates who have held elected office. donald trump has spent hardly anything. this money has not bought

anything because of this massive rejection of their message. i don't think it makes sense to group ted cruz with donald trump as a pair of insurgents. ted cruz's function in the republican party is like that of bernie sanders in the democratic party. they're both senators, they have both been elected to office. they're both career politicians. and they both, though they have extreme views, they are normal actors within the political system. donald trump is truly different. we have not seen something like this four years ago. we did not see something like this 20 years ago. we haven't seen anything like this in a long, long time. i think people need to pay attention to what a challenge it is not to the party, but to the whole american political system. >> i get what you said about cruz to some extent. i dop thin't think there is a p a live a year ago that would have said ted cruz would be the default candidate for the establishment republicans. >> i said it in writing. i wrote an article in "the atlantic." >> david is a very smart guy and was alone in that regard. again, i just differ with him. >> i said rand paul would grow

up and ted cruz would inherit his support and he would emerge as one of th establishment lane. certainly what you call a ult, mainstream, whatever. with one term in the senate. republicans have complained about a one-term senator i think before being elected, ate years ago. look, politics is like any other business in the sense that disruption finds its way into the conversation and finds its way into people's consideration. there's no doubt there's frustration across the country with politics as we know it. i think that explains a little bit of bernie's rise, though he has been a career politics and him running against hillary clinton. she's viewed as the establishment in my party and donald trump is perceived as being completely outside of the mainstream in the republican party. >> how long will bernie stay in? >> if he loses today badly, loses next week badly, i hope he considers what's best for the party. i'm a democrat. >> that first term moniker for

the president became less of an issue as he became more effective. they -- first-term senators can be effective but it dependents on where they're leading. that's the rub. where he took us effectively. >> you know who else called cruz very early? welsh. >> he did. thanks, david frum. let me know the next time you go to vegas and we'll talk. thanks, harold. mr. mayor. coming up, one of the most anticipated video games of the year is out. but there have been problems. details off the break. and later, dick's sporting good ready to report. that stock up 25% since the beginning of the year. reaction to the numbers in a bit. "squawk" about 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. and by consistently breaking apart risk to focus on long-term value.

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among the stories front and center today, lift is moving into the fast lane in its competition against rival ride sharing service uber. lyft has seen a 500% increase in ridership in new york city since last may. the programming dispute between at&t and spanish vanl univision continue. univision has gone dark for customers of at&t's u-verse service. >> are those bongos? don't you love a person who knows how to do that?

>> it is been goes. >> that's a skill. at&t is now telling customers they can get univision if they switch to provider satellite tv provider directv which is also owned by at&t. auditing firm kpmg has struck a deal about ibm to use big blue's watson technology to help with audits. kpmg says it will help them analyze data more frequently as well as offer new services. a slight glitch in one of the new video games. gamers across several platforms reported connection problems. "the division" requires an internet connection at all times. all servers are now up and running. the division is now available for playstation 4, xbox 1 and

pc. >> i don't see any zombies. smallpox virus that they put on -- >> stop, stop, stop. >> it's not a zombie situation. for new viewers or young viewers, that was people's court and you're judge wapner. >> why are like what is that music? >> do they ever play it on your show? >> never. it's exclusive here. >> good. okay. fed speak yesterday. highlighting differences at the central bank over the outlook for inflation and the economy. steve leisman is there -- actually, he's here and he joins us right now with more. >> i am here, becky. thank you. the outlook for inflation is dividing key members of the fed and creating uncertainty over how many times the fed will hike

rates this year. the recent rise in the consumer price index is now above 2%. at least on a headline basis. yesterday the fed vice chair said in washington, we may well at present be seeing the first stirrings of an increase in the inflation rate." janet yellen says it is just a data point and is focused on other factors influencing inflation. >> there are a variety of reasons to think that inflation could stabilize, could move up over time if oil prices stop falling, if the dollar doesn't rise further, if what we're seeing in the labor market starts to translate through in to higher inflation than one would expect to see it moving up to our goal. on the other hand, though, is some troubling signs that inflation expectations have actually slipped downwards. >> fisher's clearly less comfortable with this 37 basis

point points funds rate. brandon more concerned about global interests and worries that the u.s. can't remain immune from the downdraft in prices blowing around the world prp the key test is thursday, ecb set to step forward with what we think will be more stimulus. we'll look at the effect on the dollar. if another round of the stronger dollar could influence prices. >> i thought we were already ahead of the fed's targets. i saw some last week that if we continue at this pace within two months we'll be at where the fed thought we'd be -- >> for all of 2016. that's true. the question becomes fisher says, that's where we are. he doesn't want to see the fed fall behind the curve and he says it is because ultimately that means the fed has to hike more in later months. doesn't want to have that adrupt change in rates, wants to keep going gradually. >> that's been the sort of

argument all along. right? the fed -- didn't janet yellen -- >> she made that same argument months ago. >> right. braenard is saying i've got an oil problem, a dollar problem, global deflation essentially, and it is wrong to think that the u.s. numbers are really hitting a turning point. >> she's on the dove scale, where is she? >> you know, it's funny, we have a number now. you know we do this cnbc hawk/dove index. she's certainly down in the 3s where 1 being the perfect dove. >> she hasn't been on this show i don't think yet, has she? >> no. yesterday it was on another show. one of the other shows on cnbc. >> that's disturbing to me. i wouldn't care if it was another network. >> but the idea it was another show. >> that's irritating. >> more internally competitive. i'm sure she would love to come on. it was a matter of scheduling,

joe. i'm sure her first preference was to come on "squawk box." >> you just saying that? >> no. >> yes, he is. >> any big surprises from draghi? that plays right into the dollar. >> i worry that market expectations have gotten ahead of him like what happened last time. remember out there he promised this whole thing. the germans kind of limited his ability to deliver. he does not do the same job the fed does -- >> though the fed has given us too many clues. >> but going into a meeting you kind of know -- i can tell you stories being at jackson hole and talking about yoeuropean central bankers. american central bankers are much more focus on how the market could help or hurt them in delivering a monetary policy.

the europeans are like, oh, darn the market! they're just not cooperating. they're not quite as good. draghi's changed that. he overdelivered a couple of times so i think you could be setting up for a little disappointment scott, this thursday. >> if they did not offer as much quantitative easing or lower negative rates, however you call that, if they didn't do that, how would the u.s. stock market react? because it would almost mean that we would have more room for the fed to raise rates. you would think it would be a good thing -- >> now you're hitting the nub of the issue. this issue of divergence. how far account fed go given the ecb going the other way. i think you're right, becky, if draghi underdelivers it gives the fed some scope. if draghi overdelivers or meets some expectations it will be harder for the fed to raise rates with all of the world going the other way. that 1.8% or 1.9% 10-year just

looks so rich relative to the rest of the world even though we all know that it is a very low rate relatively. >> having maybe learned his lesson after the last time -- >> that he may come back -- >> -- maybe the risk is top outside this time and he surprises the market with something we didn't expect. >> just don't have the guidance we have when we talk about the federal reserve. even though you get angry there is so much talk going on, the reverse is you end up being surprised more often. coming up, the sports world is buzzing this morning from maria sharapova to the golden state warriors. we'll get you the headlines and talk about the business of sports media next and continuing along that line, dick's sporting goods, the earnings are out. we'll run through the numbers and talk consumer sentiment with "squawk box" comes back.

welcome back to "squawk box." big sports stories making headlines. we start with russian tennis star maria sharapova. she failed a drawing test at the australian open due to a substance she was taking for health issues. she is the seventh athlete in a month to test for ot substance which she used to treat diabetes

and low magnesium. the drug has been linked to increased athletic performance and endurance. leading long-time sponsor nike has suspended ties with her during the investigation. that company saying, "they're saddened and surprised." turning to law and order, a jury found a nashville hotel liable for a nude video of sports anchor erin andrews that went viral. andrews has been awarded $55 million in damages to be paid by the hotel and the man who shot that video. the golden state warriors breaking an nba record for consecutive home wins. the orlando magic fell to the warriors 119-113 last night. even more amazing, it was the 45th straight win at home dating back to january of 2015. which is better than the previous record set by the chicago bulls in the '95-'96 season. ch eck this out. ch cell phone video captured the reaction when ricky fowler

earned $1 million at a hole in one event. he earned the $1 million for the els for autism foundation. >> you take that million dollars and that never happens -- it never happens with amateurs. right? >> unless you are the kid teeing off for the first time at tiger's course. >> normally, for those tournaments, norm lir the insurance insurance is not that expensive. but you put someone like ricky fowler there, i'm told and im -- i was supposed to be there, couldn't get off work really to go down. $1.8 million raised for ernie. ernie has a son that's affected. this is a place where autistic adults can live and learn to function in society. it is really a good cause. unbelievable facility down in florida that marvin and ernie

have built. but that was amazing. i hear that that happened. you know who you get to play along with? rory was there. rickie was there. adam scott was there. >> fresh off his win. luke donald. i think jack was there. ernie's friends. they do it every year. it is great. here to break down the latest news on the sports business beat but takes us inside the new digital frontier, george pine, founder and ceo of bruin sports capital. good to see you. >> good to be here. >> start with the sharapova thing. i want your opinion on a couple of different levels. you used to run img sports. img represents her. what do you do if you're representing maria sharapova today knowing that nike, now porsche, tag-hauer have suspended their partnerships?

>> i think you do exact pli wly they did. is to get ahead of it. she took ownership for it. she admitted she made a mistake. she'll abide by the rules. i think they handled it perfectly. >> she recover from this? >> i think she recovers from it. it is a substance that wasn't banned until the beginning of the year. whether she knew or she said she didn't know. but i think she recovers. >> the question is, do we know for sure she hasn't been taking it for the last ten years because of the performance and stamina enhancing qualities of it? is that why she was taking it all along? do we know whether there was a medical need? >> how i look at it, nascar we used to have to enforce rules. to me i don't think you can speculate why someone did something. she failed a test. the substants wce was newly ban. >> but she was taking it for ten years. i would immediately be on her side. saying wait a minute, she had a medical need for ten years.

>> but she didn't say that. >> we don't know. we don't know. there is a rule, she broke it, and there is a process to address it. >> who you many performance enhancing drugs are there that you into ed to test for? i've never heard of this thing. it's not a steroid. >> no. it's not. >> how many are there? >> as long as there's competitors there are going to be people to work the edges. people have to enforce the rules. somebody breaks the rule, there has to be a process to deal with it. i think she got ahead of it, admitted she was wrong and the industry will deal with it. sponsors aren't interpreting why she did it. she broke a rule. they have an approach, they are taking the approach. >> but good for her for standing up and saying, okay. >> for owning it. she didn't blame somebody. she said i broke a rule, i was wrong, and i want to tell but it. >> kept her sense of humor, too. did she see what she said? she said i was going to be retiring, if i'm retiring i'm not going to have this carpet in

some tacky hotel in florida. >> the sponsors stay with her. >> in the long run she's the five-time grand slam clinton and as long as she handles herself correctly. >> people have won more obviously. but the highest paid female because of the global endorsements. >> we talk about the possibility that some people thought she was going to retire. peyton manning just did retire. he was the highest paid male athlete i think from an endorsement standpoint or certainly in the nfl history. >> peyton, according to forbes, earned $400 million on and off the field. he think that was a little bit light as well. obviously a great player. five-time mvp, two super bowls. really a guy, as john elway said yesterday, changed the game. they have this hurry-up offense. when he went to the line it was to try to fool defense. peyton actually went to the line, took his time and outsmarted people. i think peyton will be successful in business. think you'll likely see him in the front office or

broadcasting. he comes from a great family and is a good human being. >> talk about what you're doing these days. bruins sports capital. what kind of investments are you finding attractive just in the current marketplace? >> we actually raised two funds in the last 13 months. one for more mature businesses, bruin. another one called courtside ventures. we've actually made ten investments in 13 months. six of those investments have been in the digital space. obviously with the way data and audio visual content is ng chaing the distribution, there are enormous opportunities. we see four or five digital concepts every week. so to me, digital is a big part of the future. in bruin we invested in a digital engagement company. we're trying to understand the opportunities as media consumption and data change. >> how does the current economic and also stock market environment just play into sort of the prices that you're seeing out and the environment you are investing in? are we at a peak? have we rolled over? >> at bruin we have wealthy families. have a long-term view.

i think what people find attractive about us is our investor base. we came up through the industry. when i was a kid we hung signs, we sold tickets, sponsorships, we bought sponsorships, sold media rights. for somebody that wants to be affiliated with long-term capital and people that operate businesses, our discussions are more about growth and building and less on price. >> you mentioned digital. where are we going to ultimately end up with the major sports leagues trying to do deals with the facebooks of the world and others? which the nfl may very well do itself. >> i always say, what was fox network before it had the nfl? it was quite different after the nfl. some day there's going to be a digital pioneer like rupert murdoch who is going to plunk down some money for some rights. when that is, i don't know. >> is it going to be the traditional media guys or is it going to be a google -- >> i think it will be a google or someone like that that's going to be the fox news corp. of the future. >> you think rights fees in any

way come down? >> there's been criticism some of the fees espn had paid and maybe as people are assessing where that business is right now, wondering whether fees will come down. >> it's been a question i've been asked for 25 years and so far they haven't come down. doesn't mean it won't happen in the future as the channels of distribution change. what i can tell you is that sports rights will be very valuable over the long run. >> sure they will. bruin, from the brown, brown bears? that's what bruin's from? >> that's right. brown university. >> it's not the boston bruins. >> at first i thought it was the boston bruins. >> they changed the name of the school but when i was there it was the bruins. we're sticking with the bruins. >> what did you play? >> i was an offensive lineman. >> captain of the team. all right. thank you. >> thanks, guys. when we return we've got stocks to watch.

also, check out the futures right now. looks like things have improved slightly. dow futures still down by 50 points but we were down by 125 earlier this morning. s&p futures down by seven, nasdaq down by 18. can a business have a mind?

a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

breaking news on united airlines. david faber joins us with more. david? >> thanks, becky. united airlines ready for a proxy fight this morning. par capital and altimeter, two

owners of the stock are going to nominate six new directors for united's board setting up conceivably a battle between the company and one of its largest shareholders at 7.1%. the two stock holders saying they've been disappointed with bad decisions over the last several years and they referred to yesterday in which united appointed three new directors as a last-ditch effort adding three people to its now 15-person board, a cynical attempt to preserve power by what they call an entrenched board of directors. amongst the six candidates for the board that are being put up by par and altimeter, gordon bethune. a cnbc contributor, 74 years old. he ishas a key demand for this

group. a nonnegotiable demand that he be made chairman of the board as part of this nomination process and proxy process that's going to be under way here and potentially a fight. again, six new nominees for the board. it is a minority legislate. it is a 15-person board now. it had been 12 as of yesterday. but they also want mr. bethune to be chairman of that board. >> to first, david. people remember continental how great it was. i think there is some disappointment that the combined companies don't deliver what continental used to. >> in all fairness, oscar nunoz is just coming back, he's been out with a heart transplant. this is one heck of a welcome back. >> it really is. quite a potential welcome back for mr. nunoz, going back to work next week after his heart transplant. mr. bethune will join us later this morning. >> love gordon. >> i thought very differently

about -- >> worst to first. coming up, crude prices hit a three-month high but goldman sachs is warning the pain is far from over as they wait for the next big drop. we'll get a crude reality check next. plus vehicle leasing hitting record highs meaning more used cars on the market. how is this going to hit prices for new vehicles? former general motors vice chairman bob lutz will join us to discuss that. much more straight ahead, stick with us. we'll be right back after this quick break. 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. came courtesy of james and patricia thompson.

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happening now -- stocks swinging wildly as the bulls fight to extend a five-day winning streak. bird is the word. shares of twitter jumping nearly 35% in just the last three weeks . new this morning, voters in four states head to the polls for presidential primaries. this all happens as michael bloomberg says that he will not be running for president. the final hour of "squawk box" begins right now. welcome back to "squawk box" here on cnbc, first in business worldwide.

i'm becky quick along with joe kernan and scott wapner. andrew is on assignment today. less than 90 minutes away from the opening bell on wall street. futures have been down this morning by twice this much. right now dow futures down by 60 points. this comes after five days of in a row of gains for both the dow and s&p 500. s&p futures right now down by nine points. nasdaq off by 21. also look at what's happening with the treasury market today. yields had been climbing. yesterday they were up big. this morning the yield on the 10-year sitting at 1.85%. european stocks are under pressure. miners are khalleading the decl. that's better than it was. they were all down more than 1% earlier. so that's helped the improvement in our markets i would say as well because they have sharply cut their losses and italy and spain are up. back in the u.s., small business confidence declining in

the last month. among the reasons, concern about sales growth. also profits hurting capital spending and hiring plans. in the race for the white house, four states to watch today. it's caucus day in hawaii. while idaho, michigan, mississippi will all hold primaries today. obviously michigan is really important, see how trump holds up and with inroads being made by case being. to some extent people are wondering -- and cruz. and as we have been reporting, neither i nor michael bloomberg will be running -- you're no the returning either, are you? i think we all ought to get equal time. you're not running for president? >> no. >> he did have people begging limb to run. >> i don't care if it is 6%! >> 6% is more than a lot of sitting governors. >> we're all here in new york. we know he was mayor here. we know that. nobody else cares in the rest of the country. nobody knows. nobody cares.

who's the mayor of los angeles? >> garcetti. >> good. good. >> i know one other. cincinnati i know because i went to school with his uncle. then rahm. but it is not going to happen. i'm not running either. just to put it to rest forever. i'm not running this time around. >> that's when i do this to you. >> folks, now you know. david faber just broke a story for us. former continental airlines boss gordon bethune to be nominated for united airlines's entrenched board. david tells us one of the demands is that gordon be named as chairman. that's nonnegotiable. anybody who knows gordon knows what he did with continental before. probably pretty impressed with it.

but this is all happening as the newly appointed oscar nunoz is just back next week after a heart transplant. he didn't get a chance to really start anything. he had been on the board for a long time before that. >> right. a rail guy. railro railroad. is that gil garcetti's son? >> i think it is. i'm not 100% sure. >> someone talk in your ear? >> no. just the guy right up in here. >> that's strong. strong. gordon bethune joins david at 10:15 eastern time. who is the mayor of montclair? other stocks on the move this morning, shake shack poised to post its biggest intraday plunge in months. its sales outlook for the year was soft. shares of urban outfitters getting a boost, posting better

than expected same-store sales boosted by its free people brand. thor industries posting earnings and revenues that top estimates. lower gas prices have helped boost the rvmaker's bottom line. revenue at dick's sporting goods falling short of stilts. they cited unseasonably warm weather. >> retailers, i don't really blame any of them specific. they're all down. they've all had mixed results. why though? i thought consumer was better? >> there's more places to shop. >> weather, too. >> i'm worried about this next segment. the s&p 500 on a five-day winning streak. this is going to be like the thriller in manila. katy stockton, chief technical strategist at btig, and sean

darby, global strategist at jeffries. you're not that -- we've had a nice bounce but you think that the down trend is probably going to reassert itself? >> that's right. >> he doesn't think that. he's over here rolling his eyes. you're technical, he's more fundamental. >> right. different places. but it is a counter trend rally at this point. we do have those lower highs, lower lows. really we've seen a change in the character of the market year to date. last year wasn't great either. we saw a lot of negative divergences. that means less participation on the up side, we saw lots of momentum that was very real and yet it wasn't until january that we saw a lot of breakdowns. indeed those breakdowns are very difficult to recover from. while we've seen a very nice relief rally, the market now faces a whole lot of resistance or overhead supply to get through. >> there was an upturn in the s&p that went up into a period of years. which momentum indicator was

breached? >> right. so if you just solely looked at the curvature of the 200 day moving average which is a great long-term trend ruling device, you can see that rolls over. it doesn't apply just to the s&p 500 but beyond that. we already have downturns overseas, for example. i think we need to respect that, have a shorter turn time frame on those long positions and be somewhat noncommittal especially when overbought conditions give way to a loss of short-term momentum. >> you see certain problematic markets might be basing? >> that's right. the commodity markets have stabilized a bit this year. it is still very much also a countertrend move. of course we did see wti crude oil gets above its 50-day moving average. >> is this a countertrend move? >> it is. it could prove to be something more than that later on but still it is very early stages. it looks somewhat similar to last october or even a year ago now. i'd say we have to view it as

countertrend but something that's somewhat tradable. we looked for that break-out of the 50-day as an all-clear signal to take counterpositions. energy stocks certainly have been anticipating some stable days. >> sean, do you just want to go bearish right now? >> i'm slightly different. i think people were positioned for a very, very bearish outcome particularly for deflation. i think people were positioned here for a deep recession. what we're beginning to see is that even in the capital markets things were opening up again. we have one of the best weeks for flows into high-yield bonds. we've also seen some of the economic data turn out to be a lot better. >> people got overly pessimistic. >> i think so. that's what's expected through fund flows. $200 billion of money coming out over the last 24 months out of the u.s. again, it was very few sectors or stocks keeping the market up. i think we're going to get a pretty healthy rotation over the next couple of months as beam

revisit some of these earlier assumptions which have actually proved to be non-founded. >> you could both end up being right obviously with fundamentals and technicals. because it is nice to get some weakness to add to long-term positions. isn't it? >> right? but you don't view these improvements as countertrend rallies at this point? you think there is more to it? >> i do. i think some of the moves in inflation are very important. we've had some market moves, five-year swaps were pricing out as in some deflation environments as we saw in markets like germany and japan. i feel just a small change in inflation expectations you could have a big, big switch into equities. i think markets are not really necessarily positioned for that. >> your eyes just glaze over listening to that? >> i hope he's right. >> is it's totally different though. it's like mars and venus. does btig have fundamental

analysis? >> we do. >> how does that square with what your view -- >> i tend to focus more short-term to medium-term. so oftentimes we often manage our positions using the charts. i think that's the way to use the charts is to really understand what is my risk, what is my potential reward based on the levels. >> you deal with this every day, don't you, wapner, this kind of stuff? >> yes, i do. >> neither one is always right or wrong, either. you need an ececlectic approach. >> it is great to combine both into formulating your view on where you think the market is going. we had a technician on yesterday who said this move is just too much, too fast, the technicals are lining up, that it is going to -- the market is going to roll over. >> there is no doubt it is positive short-term momentum but it really hasn't done much more than that. we haven't seen any massive brokeou breakouts. the s&p 500 is hardly clear of resistance. we saw 2000 and 2035. >> i think in fixed income

markets like germany and japan to be thinking about buying bonds on negative yields, and if you have any small changing inflation some of the stocks in the u.s. with five to ten-year history with very high return on investor capital, decent dividend, will get picked up rather rapidly. it all depends on where the fixed income markets are in the next few weeks. i think we'll get that big switchover into a much more nicer inflation environment. >> you are a uk guy? >> i am indeed, yes. >> what is a marquess married to -- >> i have no idea. >> you're obviously not from those side of tracks. >> i'm from the wrong side. >> is it's not a mark -- i thought you would know. thanks, sean. do you watch "downton abbey"? >> i did a few seasons. it is a great export for england which we don't have very many. >> it is better than shepherd's

pie or something. >> or fish and chips. >> love fish and chips though. kind of a foodie. pancakes. anyway. thank you. coming up, renters on the rise. a new study -- you distract me every time. >> i'm interested. people in the bu'burbs like they once did. former gm vice chairman bob lutz joins us when we come being ba. at ally bank, no branches equals great rates. it's a fact. kind of like bill splitting equals nitpicking. but i only had a salad. it was a buffalo chicken salad. salad.

. ls welcome back to "squa box," everyone. u.s. equities are still under pressure this morning after a big up swing in the markets. dow futures right now down by 67 points. that's half of the losses that we had seen earlier in the day. s&p still down by ten points, the nasdaq still down by 25. to this morning's upgrades and downgrades, boston beer downgraded to underperform from outperform. clsa sees growing pressure. auto nation downgraded to sell from neutral from goldman sachs. the price target increased to r from $47. prices drop. then that makes the next lease more expensive because the company now has to take into effect the actual recent experience of the depreciation as opposed to what they guessed. so overleasing, it's just a short-term thing. it makes you feel good. you sell cars this month and next month. but two or three years later you pay for it. i don't quite understand the comment about lowering new vehicle prices. it may tend to -- no. it will certainly -- overleasing will certainly depress used car prices. if used car prices are sufficiently depressed, the used car market is strong, and that

also benefits the new car market. so the risk i've seen is for the companies' loss of residual value in their vehicles. >> how account car companies actually control the leasing? my expectation was that there's an offer for a lease and any dealer can pick up and decide to offer that to any customer. is there a way that you can -- >> well, you can because you can set -- the company can pretty much set the lease rates. if you set the lease rates at a reasonable level that actually reflects the amount of the car that you're going to have to cover over the next two years, then -- if that's right, then your lease rate will come out at about 15% or 20%. however, if you issue a really low rate, like no money down, 99% a month and everything, you'll see a sudden expansion of leasing with really bad effects.

>> it seems like it would be self-correcting if -- like when you turn it back in, you said the lease rates will get too high the next time around. seems like it would be self-correcting. and number two, the other point to make, if it is bad for the car companies, isn't it good for consumers? shouldn't i want to lease then if it turns out bad for the car companies, seems like you're getting a deal they didn't price it right. >> well, sure. low prices are always good for the customers short-term. >> okay. i'll keep leasing then. >> until the car companies are in real trouble. >> bad for them, good for me. >> let me put it this way. on a bmw, mercedes, audi and all of the so-called premium brands, these sort of medium-income white-collar americans who all "buy" mercedes-benzes, audis and bmws, they don't buy them.

these people couldn't afford to buy a $50,000 or $60,000 car. but a $400 a month lease on a three-year lease, that they can afford. that's to your point. certainly leasing has made -- can't say the ownership, but it's made the use of premium automobiles pretty much available to everybody. >> bob, this is what we've heard similarly from mike jackson of auto nation who said that he thinks a lot of the deals that have been offered to just kind of juice sales have made him question the strength of auto sales lately and he worries about the profitability of them. would you echo those concerns? >> well, for some reason, i like michael jackson, and for some reason he and i always come up with the same theories at the same time. i think he's absolutely right. anybody who is over-heavy -- as i say, it is no different from futures in any other commodity.

basically when you set the lease rate, you are making a bet on what those used cars will be worth in two year's time. and if you get it wrong, you can really have to take a massive write-off. >> bob, always great to see you. thanks for coming in this morning. >> sure. coming up, maria sharapova fails a drug test and two of her largest sponsor suspend ties with the tennis superstar. how much is it going to cost her and when is she going to be back, if at all? we needed 30 new hires for our call center.

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nike and tag-hauer have suspended ties with maria sharapova after she admitted to failing a drug test at the aussie open. she says she's been taking a drug called meldonium for the past ten years. it apparently enhanced performance. she was taking it for diabetes and magnesium. it was just banned january 1st. she hopes to get another chance to continue her career. the 28-year-old could face a year-long ban and that's significant because there are some that thought this might be a retirement announcement. 28 sounds obviously very young but tennis, man, you got to be -- you see people at 17 and 18 years old when they win their

first one. you've just going to to be in such incredible shape to play at that level. maria sharapova is the world's highest paid female athlete because of endorsements. forbes estimates she made $30 million. not much of that was on the court. i think $6 million or $7 million on the court which leaves $24 million for sponsorships. in addition to nike and tag heuer, avon, and porsche. wti. is it too late to jump on the comeback? inside the numbers after this break. . first, a look at u.s. equity futures. now down seven for the dow and 11 on the s&p. 26 on the nasdaq.

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welcome back to "squawk box," everybody. leer's what's making headlines this morning.

activist investment firms altimeter capital management and par capital will nominate six directors to the board of united conned nent continental. they include the former head of continental airlines, gordon bethune. he'll be on "squawk on the street" at 10:15 a.m. eastern. former american airlines boss bob crandall will join us in 20 minutes. in other airline news, both jetblue and southwest report an increase in passenger traffic for february but they also are talking about capacity that grew even faster. jetblue says both it and its competitors have add the capacity and that profits are under more pressure as a result. the justice department has asked a judge to reconsider his decision in an encryption dispute involving apple's iphone. the judge had refused to compel apple to unlock that phone. in a new york state drug case. apple of course is involved in a higher profile case involving the iphone in the san bernardino

shootings. in other news this morning, lyft's ridership is increased 500% in new york city since last may. lyft's pool of drivers has multiplied by four times and that weekly riders multiply by six times. lyft recently cut fares in 33 cities, including new york. and check this out. the yelp for peeple act is finally here. the maker says it provides a reference check for the people around us by showing reviews -- god, almighty -- reviews of neighbors, co-workers, even dates. generated a lot of buzz and criticism when the idea was originally revealed back in october. i've actually seen one of our guests that was on today talking about this fractured political situation we're in. giving credence to what i've been saying, this is all because of twitter. all the ills of the world --

>> imagine rating your co-workers? >> all the ills of the world are because of the social media stuff. it really is. it is just a cesspool. people say whatever they want. it is like online graffiti. >> and it gives you a license to say whatever you want. >> i'm getting my house in order. someone's coming and we're -- hopefully you're prepared. the end of days -- i'm with that guy. whatever his name was? harold camping or whatever? might be from climate change. speaking of climate change. chevron is hopeding its anim ho meeting this morning. >> good morning. chevron's annual analyst meeting kicking off right now as we speak. the number two u.s. energy company will discuss capital spending, production cash flow of course what ceo john watson called the number one financial priority, the dividend.

entering lease ahead of the event, chevy cutting its price targets for the year. 2016 spending cuts -- spending of it $25 billion to $28 billion does seem to stay the same, but chevron affirming production growth through 2020 even at "moderate prices" even with less investment. in january it forecast 2016 output to be flat up 4%. that looks like it is staying the same for this year. watson saying this should help improve cash flow "significantly," and that chevron plans to limit debt increases beyond 2016. all of this as he again reiterates the commitment to that nearly 5% dividend that chevron pays out. also in focus, the $54 billion gas export facility in australia. the company announced last night it is producing liquefied natural gas there and that is expected to start shipping next

week. analysts say that should generate solid cash flow this year and again something that could bolster the difficult vend. on a programming note, ceo and chairman john watson will be on the closing bell later today so stay tuned. big energy companies like transamerica and darko all up 40% since january's low. >> good morning. >> amazing gains really. so many stocks in that space are up 50%. right down, 40%, 30%, 20% on some well known stocks. have they come down too fast and is it sustainable? >> i think when you see these type of rebounds to put things in perspective from their highs. i think these stocks are still somewhere between 60% to 70% off the highs they hit a couple years ago. these moves do not portend necessarily the end of a run. >> you heard from goldman sachs

out today pretty much telling clients, look, don't believe the hype. the whole commodity spectrum has come too far, too fast and it is not sustainable in any way. do you agree? >> i generally think there will be opportunities within any cycle recovery. for example, you look at a company like neighbors. neighbors is basically flat on the year with some of the stocks in its respective industry peer group may be up 15%, 20%. you can always go through and find some opportunities even in a broad-rebound sector like this. >> you had another note out yesterday. whether it was leaked or however it was made public, it was from a consulting group called pira which is thought of to be a pretty good prognosticator on the energy space saying that $50 oil was where we were going and it was because we were going to eventually see maybe sooner than later some of the supply cuts that have been rumored from opec

for the last many weeks. what's your thought on that forecast? >> i think there have been potentially two pivot points that could mark a cycle turn here. the first one did occur back on february 16th when effectively the saudis did agree to a production freeze. granted, a production freeze is not a production cut, but it does mark a significant change coming out of the saudis since the cycle downturn occurred. second pivot point has occurred during the past month. there have been a number of companies that have indicated they're going to cut their spending by 50% to 80% this year and they're using now a $30 strip price. that's in stark contrast to a year ago when they were still talking about production growth and maintaining spending and still looking at a $50-plus oil price. i think when you look at cap x cuts, they are the definitive lead indicator to production rollovers and that's where we need to see a siebel recovery.

>> are we done talking about majors and dividend cuts? conocophillips sort of surprised a lot of people. i think conventional wisdom is that chevron and exon, there's absolutely no chance in the world that they would cut their dividends. your thought? >> from the majors oil standpoint, that's not my specific area of purview but i would just say that for many of these companies, dividends are very important. you have seen reduction in capital spending. i think that reduction in capital spending gives them enough ammunition to athlete maintain their dividends where they are. >> kurt, thanks so much. . when we return -- the little bluebird may be on the mend. what is the initial beating post earnings an investor overreaction? we'll break it down in under 140 characters. as we head to break, the etf that tracks the social sector is up close to 12% since early february. squawks box will be right back.

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.

news breaking just a few moments ago that the planned sun edison deal with vivent solar after vivent accused sun edison as failing to consummate a deal. the planned deal woosas a big pt

of concern for appaloosa. mr. tepper told me, "this is probably a very good thing for taraform." one has to wonder what's next. mr. tepper had criticized their corporate governance as it relates to the deal. the deal was valued at more than $2 billion when it was made last summer but sun edison's financial position has weakened. sunedison this morning up more than 32% on news that this deal is not going to happen. >> this is as simple as oil prices? these things are not -- they're not competitive. are they? was that 36-2 that i just saw there on that chart? >> pull the chart back up. the stock's gotten obviously

hammered. all the way down to 2. 2 is with a 35% gain this morning. >> today. >> just on this news. david tepper obviously a very interested party in how this will play out. he was critical from the get-go. he sent those scathing letters to the board of terraform in the past questioning some corporate governance moves. but his comments to me a short time ago, this is probably very good. he did not want those assets to go to terraform, that it was just a departure from that company's business, that these were rooftop assets. twitter rebounding after a rough fourth quarter. i did that for you. shares of the social networking site are up nearly 35% in the

last three weeks. jon fortt, you're walking. if you're reporting, you are walking. . >> for you, i'm sitting down right now. >> i said he doesn't need that chair. >> it's all i can do to just sit still. >> i have just said twitter is causing the end of the world. but at least the stock is acting a little bit better. but i use it, i do. i'm guilty. i look at it thousands of times a day because of the news feed. >> right. >> so i guess it's got to have inherent value but it's just hard to monetize it. >> does it have $14 billion of value? does it have $20 billion of value? i think that's part of the question. it is a whole cohort of growth tech stocks that have been doing much better over the past few weeks. linkedin had that big fall after earnings, down near $100. it's up 15% to 20% off its lows. look at groupon. groupon is almost doubled from its lows. some of these stocks aren't

great performers in terms of how their business is doing. that makes me wonder how much of this is because investors -- at least some investors are feeling a bit more comfortable with risk now perhaps with oil off of its lows. their maybe it will hold better in some stocks than others. >> you think people going out of f.a.n.g. into these beaten-up teches? >> i don't know. >> everything but facebook is down i think double digits here today. >> amazon was down near 500. now it's up i think around near $560. some of that has come back into some of those stocks as well. to me, it feels like still a time to separate the different cases for these stocks. you look at a stock like workday, founded by two of the guys that came from peoplesoft. they set out to build a

next-generation enterprise software company for the long term. so when you look at that company's prospects, i think you have to separate it from a company like groupon which has been through pivot after pivot. to me it is a head scratcher that both of them are rebounding because it says maybe investors aren't distinguishing between these different kinds of stocks. >> is twitter buyable? >> i don't think it is buyable. they haven't shown proof they can grow their cub scrisubscrib that they can meaningfully engage users. facebook and snapchat are showing better growth. twitter is clearly trying a lot of new things, a lot of new advertising. but i think until they actually show they can really engage users and grow their users base -- >> it is not even about being able to monetize it and make money. it is able to have an actual value to more and more people so

that they grow subscribe -- i understand news people use it. but i don't understand the man on the street, why you would use it. >> the oscars, 400,000 tweets over leonardo dicaprio's win, but on the average basis, the younger generation is using snapchat for hours a day. facebook is seening considerable usage not only on their core news feed but also on video. instagram is really addictive for people around the world and twitter just has not captured that yet. >> and you are not convinced it's going to. >> they're trying a lot of new things. i think for the rest of this year twitter will release a lot of new features and capabilities but i like these other platforms. i think jsnapchat is a great long-term bet. >> what do i use that for? to send messages to people? is it like anthony weiner's

dream? >> i have a 16-year-old daughter who uses it every day. i'm on ifnd a i use it a bit. she said dad, it's not for you. i thought that was an interesting comment. >> you are a he not cool. >> the interface is a little bit strange. it is not intuitive. it is not as easy to use as other platforms. but the sub25 generation, the 15 to 25 year-olds, that is their facebook. that is their instagram. that is how they communicate in every single thing. >> when you tell me that's their facebook that doesn't help either. we got to end it. thank you both. coming up, it is the news of the morning. activists pushing for big changes at united. veteran airline executive bob crandall joins us next.

welcome back everyone. altimeter capital management and par capital are nominating six board of directors including industry veteran gordon bethune, former head of continental airlines. joining us is robert crandall, the former president and chairman of american airlines. bob, this news, first of all, does it come as a surprise?

[ laughter ] >> hi, becky. no. as a surprise? sure. i did not expect it. not entirely ununexpected. >> because of united's performance or gordon bethune. >> not because of gordon. he's a capable airline executive. putting him on the board makes a lot of sense. i think the activity itself is a consequence of united's -- it's been an unsteady situation for a long time. they never have got the right sense the merger with continental and the consequences, as you know, people now expect airlines to do way better than they used to expect them to do and the consequence of that is i think we got activists who said, look, let's see if we can get pros in there. maybe they can help united do

better. >> yeah, bob. not only shareholders who expect better performance but probably customers as well. what went wrong with the united continental merger? why did things take such a long time and still really not jump. >> oh, who knows? you have to be inside to really know the answer to that. obviously these are very complex undertaking. if the planning isn't done right, if the execution doesn't follow the plan the results aren't good. that seems to have been the case here. just exactly why that's the case, i don't know. i'm not sure anybody else does. >> bob, there is an article either yesterday or the day before. i don't know who had an ax to grind. it was about your old company american. they have returned some of the anti- -- the poison relations between unions and management again. ceo doug parker has done a good

job. he was saying i think he was trying to listen and address concerns. did you read the article? do you know what's going on there? >> i did read that article, joe. i must confess, i am buffaloed. i think doug has done a carefulle job of trying to listen to the pilots and in this case is article focused on pilot dissatisfaction. he's done a capable job of trying to listen. as you well know, management can't simply yield every time a particular union makes an assertion or says they would like to have a particular thing. the focus of the article seemed to be, at least in part, on the performance of the company, that is the performance metrics. it is true. the performance metrics haven't been as good as they could be. i know as well that doug is working hard on the issue.

i assume the pilots know it as well. it just seems to me it would be better if a group had a concern about the company trying to talk privately to management rather than turn it into a media circus. >> you want to keep them happy. like the guys on the field. you have the coaches and those guys. you want the pilots -- flight attendants are always in a bad mood anyway, right? >> i hope you fly soon. >> so i don't get a coke. the pilots -- i'm not getting peanuts anymore anyway. the pilots are important. am i wrong? >> listen, joe, airlines are big, big complicated public service organizations. everybody that works for them has to do their job well. if they are going to provide the right kind of service to the

public. that's management's job to try and make it work. i know doug is trying to make it work. i'm sure the board at united, if the new guys get installed and particularly if gordon is there they will work hard at it, too. >> thanks for joining us today. >> good to talk to you guys. >> hope we see you soon. stay with us on cnbc. gordon bethune will be on "squawk on the street." >> let's get to the new york stock exchange. jim cramer joins us now. did you get a blood transfusion? you're vertical. >> i don't know. put it this way. i come to play. i come to play. >> cold or flu. >> laryngitis. i went to the doctor. just classic larn jiets. i get it a couple times a year. talk too much. talk to you guys, talk to the

show, talk to wo"mad money." i'll be fine. >> given you do "mad money" every night nd it's just you, i'm surprised you're not always hoarse. >> that's why i cancelled by radio show. i was doing 15,000 words a day. i can't do more than 12. >> you have to have all the tweets, too. >> mostly thank you. i'm taking that. >> that's the best way to do it. man, do you see any of the negative tweets about nancy reagan? did you look? >> your kidding -- you're kidding me. >> oh, my god. >> that's the end of days coming. anything in the market catch your eye? >> we have to be careful. a lot of the dollar stocks and $2 stocks are going higher. that's frothy. i want them to come down. i want mineral stocks to come down and the consumer product stocks to go higher. i'm waiting to hear what faber

says about united. we need transports to go better. that makes me happy. >> thanks, jim bo. i'm glad it's just the voice. >> just laryngitis. >> coming up, candidates for the stock of the day. today's stock of the day. we'll have today's stock du jour after we come back.

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watch shake shack shares getting -- who does that? >> shake shack shares, shake shack shares, shake shack shares. >> be careful. >> i was going to get that. it's getting hit on weak outlook but there is a stock down 9%. >> scott, thanks. watch scott later today. >> have fun on the show. >> that does it for us. now it's time for "squawk on the street." ♪ good tuesday morning, welcome to "squawk on the street." we are at the new york stock exchange. after five days up stocks looking to give some back at the open as we juggle information from retailers. europe lower despite german

production up nicely, first time in three months. oil squeeze continues now up nearly 30% from lows this year. api inventories are tonight. we begin with will the rallily in