coming up. it's thursday, february 9, 2017, "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box." good morning, welcome to "squawk box," i'll melissa lee along with michelle caruso-cabrera, along with steve liesman. tomorrow we have becky live from the links of pebble beach. the nasdaq after posting yet another record high in yesterday's session looking to add one point at open. the dow and s&p looking to open slightly higher. looking at the action overnight in asia, we will see some mixed

action there. hang seng and shanghai higher. japan's nikkei closing lower by a half percent. as for the picture in europe, it was marginally changed. we do see some fractional gains across the board, except for italy. the action in you'd, we saw a pull back yesterday. and a bit of a rebound here. especially in nat gas. here are the big stories we're watching. a federal judge blocked a $54 billion merger between anthem and cigna on anti trust concerns. after a judge blocks their merger on antitrust grounds. we have weekly jobless claims out at 8:30, followed by december wholesale trade, and jim bullard is talking about the economy and monetary policy at 9:00.

and chicago fed president, charlie evans speaking this afternoon. coca-cola, kellogg, viacom, yum brands and twitter all report results before the opening bell. after the close, we'll hear from blizzard, expedia, news corp. and incoming coca-cola ceo james quincey will join "squawk on the street" at 10:30 eastern. the snow is already starting to fall. a winter storm threatening to drop a foot of snow on the northeast. public schools are closed in new york city, boston and philadelphia as well as my hometown of west chester. 2700 flights have been canceled. near whiteout conditions are possible. snow expected to fall at a clip of 2 to 4 inches an hour. following the snow, high wins could bring gusts of 50 miles per hour, leading to power outages. temperatures expected to drop into the 20s across the region. we'll get what excites weather

folks, called thunder snow. does it excite you? >> i'm a weather geek. thunder snow is like the be all end all of all the -- >> it's a real thing? >> it's a real thing. >> sounds sm s made up. >> no. you get thunder. the snow thumps down. they're talking about snowfall waits of 2 to 3 inches per hour. >> it's not a sound that comes from electrical charges within the -- >> no, no it is. thunder happens, snow comes down very quickly. >> extraordinary. >> to me it sounds like a product to ride over the snow. buy thunder snow. >> or a movie. >> yeah. >> post apocalyptic movie, thunder snow. >> cool. moving on to political news, trump has broken the ice with chinese president xi jinping by writing him a letter. trump wishing xi a happy new

year. he told the chinese leader he's looking forward to work with him to develop relations. chinese media reports that xi appreciated the letter and is will be to work with the u.s. to advance ties. this is trump's first direct communication with xi since he took office. >> is this a big deal? this seems like reset. you're the foreign correspondent. >> i suppose. it is the first discussion. i presume it would be pleasant. he's talked to so many leaders in the lead-up -- >> including taiwan's leader. >> that's why i'm asking. i think this is a potential market event. if donald trump comes back to the center on foreign relations and somebody talked to him and brought him back to the center -- >> i would so bet against that. >> if the market sees that

donald trump has calmed down when it comes to foreign relations, i think that's a huge positive for the market. >> i am so not convinced. >> okay. >> he's the same person every day he wakes up. >> i don't think the worry about tensions has been a huge detriment to the market. >> i disagree. i think that hangs over the market. >> i think it's a hang but not a major hang. it's out here, and in the middle is tax reform. >> the conversation about the trump presidency has been good stuff coming in the form of tax cuts, infrastructure spending, less regulation, but the foreign trade relations is something that hangs over the economic outlook as well as the investment outlook as a huge negative. if that becomes less negative. i think it matters more. >> speaking of canada's foreign minister, warning the trump administration that canada will

strongly oppose any new tariffs calling them mutually harmful. more than 75% of canada's exports go to the u.s. 30 of the 50 u.s. states count canada as a leading market force for exports. what is disturbing to me is the lack of discussion. tariffs, border adjustment tax, border tax, everything gets conflated. they're not the same thing. what the house wants to do with tax reform, corporate taxes, it's not tariffs, but people think they sound like tariffs. >> but the president adds to the confusion talking about punitive imported tariffs. >> which sounds like border taxes. >> i'm not sure they know precisely what they'll do yet. >> president trump will meet with u.s. aviation executives today. among those expected to attend the ceos of united, southwest,

alaska airlines and jetblue. they will talk about aging airports, reform and control in the industry. the president's controversial immigration order is also expected to come up. more ceos are making their thoughts about president trump known. last night jeff immelt told cramer that he likes some of the moves the president made so far. >> there's a lot i like in what president trump is doing. infrastructure, tax reform, regulatory reform. outside the u.s. we're on our own. you have a highly global economy, we don't need trade deals to be effective. we can navigate the world on our own. i'm perfectly comfortable doing that. i think it's up to me from an investor standpoint to be a good american company but still be able to do business in saudi arabia, china, brazil and we plan to keep doing that. >> we don't need trade deals to be effective. that's interesting to hear from

a ceo. immelt also said if he were to get called out by the president like other ceos have over job creation in the u.s., he would ask trump to help level the playing field. what that means these days. gets thrown around a lot. cnbc caught up with fedex ceo fred smith after he was leaving the white house yesterday after a meeting with the vice president. >> i've been very vocal on behalf of the 496,000 people that make their living at fedex. we need to lean in to trade, not become more protectionist. we need to expand our exports, and our tax policy should make it desirable to invest in the united states. we do those two things, our economy will do fine. >> apple's chief executive chiming in on trump's policy condemning president trump's

immigration ban during a speech in scotland. >> we have employees that secured a work visa, they located in the united states, they brought their family to the united states, they happen to be outside the united states when the executive order was issued, and all of a sudden their family is split. they couldn't get back in. and arguably that is -- that's a crisis. >> cook also discussed the importance of diversity to apple saying steve jobs was the son of an immigrant and that the tech giant depends on diversity. >> so that was a heartbreaking situation that tim cook discussed. but the administration has since walked that back. when you read their brief, they say specifically that green card workers will be fine. we didn't mean to get visa holders. the rollout was poor. but to suggest that what tim cook said is a permanent situation, it's not. it's temporary, and now the

administration admits in writing probably that was a mistake. >> at this point they're worried about the implications of h1b later down the lean. peak earnings season is winding down. we have the dow itself trending towards the fourth down week in the last five. for more we are joined by sara hunt, and peter bookbar. we appreciate you guys making it through the snow this morning. what's interesting about the markets, peter, we're within a stone's throw of new market highs. yet we are seeing this could be the fifth straight advance today, that's the longest winning streak for the bond market since june what do you think is holding the market in pause mode right now? >> the stock market has been in

pause mode since mid-december. it is interesting to see this drop in interest rates. at the same time stocks are holding their gains. if we look out, the stock market is assuming this clean unveiling of tax and regulatory reform with no unintended consequences, and the bond market is getting a little itchy with what actually will get passed. what the implications are for trade battles and currency issues and this and that. this has to be reconciled in some way. we'll get that within the next couple months. >> this might make you crazy, knowing what you think about the fed, but could the bond market be signaling they think the fed is threatening to be too aggressive? >> i think ideally janet yellen in her models wants to raise three times for the next three years and get to her magic 3%. exactly where the dots are. right now the bond market is not saying they'll raise three

times. they said they're not going to raise once until june. i think she is going to be more hawkish. she wants to give herself flexibility that march is a possibility. the market is not set up for that. yes, maybe we're seeing flattening, because they do think -- >> if you're worried you won't get tax reform which has underpinned the rally, which presumably was going to grow the economy more, lead to reflationary trade, then raising rates into that, it would be a logical response, no, to push the ten-year yield lower. >> the market is giving her rates. she would rather raise rates with the market at all-time highs than down 10%. >> what is the market signaling? it's not just the bond market, gold is advancing. >> i would say gold says uncertainty. and gold says you know what? let's put a back stop into this. put some money in there. i think if you look at interest rate differentials across

countries, you can see why where with european rates and japanese rates, there's an arbitrage still within the ten-year. that could have an effect on the ursz markets. u.s. markets. you look at the functions that say will they raise rates? the percentage has dropped for march from 37% to 38% down to 24%. there's an expectation that rates will not come up quickly. if they do, this could be disconcerting. it will be disconcerting to the housing market. >> and how everybody has piled into financials. >> you've seen the yield curve steepen. there's been a lot of movement there. a lot of expectation that it would be a one-way street. >> let me try something on peter here. to me the fed has played this right in the following way. the market decided to discount all the good stuff from donald trump early on, as did the bond market. that included higher yields,

higher stock prices. the fed said no, no, no, we have to wait to see what will happen. i think the market view is coming more in line with the fed view, which is to be more circumspect, price it when it happens rather than price it forward. >> the stock market has not. >> the tra jekjectory stopped g like this. it flattened quite a bit. >> it's still holding those levels. if tomorrow it comes out that trump says we can't get the border adjustment tax done, we can only lower the corporate tax rate to 25%, i don't think the stock market will be where it is. the effective tax rate is already around 25% in the s&p 500. >> you know, it's been weirdly refreshing to discuss the fed for as long as we have this morning, instead of trump, trump, trump, trump. we barely talk about the fed anymore. >> i think 2017 about be driven more by the fed, ecb, boj than what trump does.

>> really? >> i disagree. >> i think the fed will be raising rates potentially three times. the ecb is cutting qe by 25% in april, and the bank of japan is getting tested daily. >> do you agree with that? >> i think they'll want to do those things. i'm not sure they'll be able to back off. >> i think kevin brady and paul ryan are more important now than any two fed governments. >> i agree with that. peter says otherwise. coming up, big changes expected for banking regulations under president trump. aaron klein from bookings will tell us how dodd-frank could possibly be rolled back.

that's cool. >> steve, you did a nice job out there. the snow angel. welcome back to "squawk box." a u.s. district court upheld a controversial labor department fiduciary rule that was created to fix conflicts of interest. the decision to uphold the rule is a possible setback for president trump who ordered the

labor department to review the rule. president trump's executive order on financial regulations causing more friction between republicans and democrats. let's find out what lies ahead forever dodd-frank. joining us now is brookings institute economic studies fellow eric klein. he helped write dodd-frank. you worked for dodd. >> i did. i worked for dodd and then tim geithner. >> we won't hold that against you. >> pleasure to be here. >> did banking regulation go too far? >> there's a great debate about this pendulum as to whether or not it swung too far. we clearly started off in the wrong place. in terms of whether or not it's gone too far, probably in certain instances. the history of these big giant legislative overhauls after a financial crisis is usually you get one or two pieces of legislation. >> when you talk to bank ceos,

above 10% of the staff is dedicated to compliance. that's one cop for every nine people. >> that's true. but that compliance stat belies two different things. number one, the question is what are any complying on. some of them are aml -- >> anti-money laundering. >> that's not related to dodd-frank at all. another aspect of that, there were too into compliances in '07. one thing i hear our compliance tripled from '07. that's nice to know but this doesn't tell us what the right number was. >> five different agencies decide whether or not the bank has complied properly with the volcker rule. in the meantime, i listen to the ceo of bank of america, on the record discussion, he said in the meantime we don't do prop trading because the capital requirements are so high it's not profitable. in other words, wouldn't it --

so my question is when you have much higher capital standards like we do now, doesn't all of these extra people become redundant and costly and besides the point? >> so there are a couple good points on that. one is does higher capital solve everything? it solves a lot to. but you still need proper management. what are you basing your capital on? people say the banks were really well capitalized in '07. people didn't appreciate the ranks of the loans. >> i want to get your opinion here. if you look at the market more broadly, a lot of gains are from financials. you look at xlft surged. given that financial regulatory reform has to go through the fed, all of the agencies, the senate and the house, if you look at the x lshgszlf, has the

gone too far in poliricing in relief? >> the treasury department is not a bank regulator. it goes through independent agencies. those will take time to change. my biggest fear is that the things could get worse. the five agencies in volcker, at least they all have the same rule. as new people come in, they may diverge. one part of the trump order that i liked is where he asked the treasury department to streamline some regulators. we have too many of them. as a result of dodd-frank, we created three new regulators and got rid of one. we need to modderize and combine some of them. that may let the market releali some of those gains they priced in. >> those gains were built solely and primarily on the notion of deregulation. and most investors would say those gains were built mostly on

the steepening yield curve. >> not if you look at the market on the day the executive order came out. financials surged. there's a bunch of relief built in. as well as steeper yield curve. >> i think it's a bit of both but the executive order was overhyped. you mentioned the fiduciary duty rule. >> that was a memorandum. >> that came out at the same time. that's a much bigger impact in terms of how washington works than in terms of changing a rule or process. what happened was trump put both of those out the same day, the media ran to dodd-frank. the fiduciary duty will have a bigger impact on the bottom line sooner. >> i agree with that. as michelle pointed out, that was hem rand dumb so much less bite behind that. there is not a delay in the -- >> the court case order this morning, too. >> i agree with most of the goals in there. i could have seen a democratic

administration espousing some of the same goals. >> a lot of people hoped for the roll back of dodd-frank. alan greenspan has been on the show saying throw the whole thing out. doubtful that can happen a at this poi this point. isn't there a lot of forbearance that with happen in the banking sector? >> absolutely. you can have regulators who don't really want to aggressively enforce the rules and roll them back, and congress is somewhat paralyzed. if a regulator doesn't complete a congressionally regulated rule, there's nothing congress can do. >> what do you think of jeb henc hencerlink's alternative? he has something passed in the house, not beloved in the senate. the idea is you raise capital

high enough, you can get rid of it. >> is it a simple risks weighted average, a stress test? i think you need both. i look at eating chinese food, with two chopsticks, you can eat eloquently, with one, it's a stick and you're poking at it. some of his ideas just have a capital 10% ratio and not d differentiate assets behind it. i couldn't get behind the entire bill, there's other goodies and rollbacks that are extraneous about that. if you focus more heavily on stress testing, risk weighted and simple capital leverage, i think the case for prudential bank regulation becomes weaker. but i think it would be more

impactful if we look at some other regulations like bank secrecy and aml driving up compliance costs at what marginal value. >> they would argue it's a national security issue. that's another discussion. >> the number of sars, suspicious activity reports that banks have filed have grown by millions. >> thank you, aaron. >> my pleasure. coming up, energy expert dan juergen will jor yergin will join us. he will talk opec, oil prices and energy policy under president trump. as we head to break a look at yesterday's s&p 500 winners and losers.

that's appropriate for weather, rain and snow. >> good morning. welcome to "squawk box." let's look at how u.s. futures are pointing. looking to open higher. the nasdaq set a new record in yesterday's session. be watching that index. wells fargo's board is considering whether to eliminate 2016 bonuses for top executives following the bank account scandal. the board met last month and discussed withholding bonuses

for tim sloan, john shreshrewsb and other senior management. we are watching tesla closely here. surging in the premarket. it will build test mottles of the model 3 car later this month ahead of a mid year deadline to begin full production. reuters reports tesla will begin manufacturing the vehicles february 20th. elon musk says it is an electric car for the masses with a starting price of $35,000. look at that action here. just not very far away from a new all-time high on tesla. >> what is the multiple on tesla? >> it doesn't make any money -- >> so zero. >> if it opens here, this would be a new high. >> musk has managed -- >> most of that advance happened

after the elections. >> musk managed relations with donald trump well. >> i agree. >> people were concerned about that. >> it helps he manufacturers in the united states. people thought he would be on the outs with donald trump. he managed to keep his sense of the things he believes in, but also get close to the president. >> the very first reaction when the election happened was all those subsidies, see you later. >> yeah. u.s. oil production turned around and is still trending upwards with crude production expected to reach 9 million barrels a bay this year. let's find out what lies ahead for oil production in the trump era. joining us is dan yergin. i was thinking last night i have known you for 25 years. >> that's right. >> back to my early days in russia when you were a leading thinker about russian energy production and through the decade. i wanted to ask you one of the remarkable things you have noticed recently, something we have not seen over the decades,

opec sticking to an agreement. what's up with that? >> i think the reason they're sticking to the agreement is necessity and what it means for their own national budgets. it forced them to get together. even more striking is the adherence of russia to this agreement and that you have 12 non-opec governments who have also signed on. in fact, it's striking to us that the russian oil minister will come to our conference in a few weeks. i think he wants to affirm these countries are sticking to these quotas set up. >> i remember when we did this in the mid to late 90s, it took three, four, agreements to get to a place where they cut production. let's talk about what it means for the u.s. i thought the whole idea of let it fall idea was to hurt u.s. production. now they stabilized the price at a place where it seems comfo

comfortable for the u.s. to produce. >> we expect u.s. production to probably increase from beginning to end by more than 500,000 barrels a day. the exporting countries in 2014 saw this amazing thing. where was all this u.s. oil coming from. they say now it will be there, it will be a part of the market and they'll adjust to it. they see it in the overall context in a way that they didn't in 2014. >> what does a trump energy plan that ends up reducing regulations, perhaps providing more areas for drilling, what does that mean for u.s. production? i don't ask that question just by itself in context of where prices are? there's a limit on production from the u.s. which has grown quite a bit, but now a price around 55, not 100. >> was we've seen is tremendous

improvement in terms of efficiency. a dollar invested in 2017 produces about 2 1/2 times as much oil as a dollar invested in 2014. even at lower prices we will see this recovery. not the boom like before, but probably more change in 2017 than 2018. i think what you were just talking about in terms of finance, it's the same thing. a lot of regulation. i think it was the sense that there would be more regulation and more regulation. clearly that's not going to happen. you won't federalize oil production in the way it looked like it would happen. it would remain primarily regulated by the states. >> dan, can you walk us through what, if any impact upward pressure we'll see on wti in the united states, if there is a border adjustment tax? is it that easy for refiners to start buying? >> the border adjustment tax is

all about encouraging domestic production, whether it's manufacturing or oil. so it would be an advantage for wti oil over international oil. so for domestic producers, it would be very good news. for refiners who are importing oil, it would not be such good news. >> you don't believe the dollar will adjust, dan, the proponents of the border adjustment tax say you're all stressed out but it will all even out because currencies change. >> that's the theory, the dollar will take care of it, protect consumers. we don't know that. economies don't always work in exactly mechanically predicted ways. >> dan, you were in the meeting with the president. there was a discussion about the border adjustment tax. what do you think he thinks about it? does he like it? does he not?

>> just between you and me. >> i think it was a business-like meeting. there was a lot of exchange. different points of view. part of the discussion was what does the transition long like in this? is it smooth or not? and that question raised about the dollar. this is a concept people are grappling with, trying to understand how it would work. >> he's grappling with it? he's thinking about it? >> what i saw, there was a lot of exchange back and forth about different perspectives around the room. i think, you know, they were industries reflected there, and he heard different points of views from different industries. >> dan, what do you think about this relationship between trump and putin? some people call the guy a flat-out killer. >> i think it is quite striking

that the leader that he's been most positive about is vladimir putin. it's a surprise for everybody. he did say in his interview the other day he hasn't met him yet. by this has everybody who works on u.s./russian affairs scratching their heads saying how is this going? it gets into the whole relationship with europe, the issues of ukraine. so it's a relationship in development. >> dan, so good to see you. thanks for joining us this morning. >> thank you. coming up, twitter expected to report at the top of the hour. we'll bring you numbers, reaction from an analyst and then regulation in focus. trump administration preparing to overhaul dodd-frank and banking rules. republican senator mike rounds will join us at 8:00 a.m. and steve ballmer joins us on his new project, improving

government transparency. you're watching "squawk box" on cnbc. alue of catata at'stiinking4 's tm iror alue of catata

we have a special visitor on set this morning, diana olick made it to new york before the snow. she has an exclusive guest who also made it. >> big news in fitness.

a major announcement from one of fit tech's leading disruptors, pelaton. they have seen huge growth since announcing a home cycling platform. 20 minutes from now, the ceo, john foley, will announce he's naming former barnes and noble ceo william lynch as pellaton's first president. congratulations on the new post. tell us what your appointment means to the future growth of this company? >> the company has huge ambitious growth, and if you think about the flat form built with the fitness experts, we're expanding in other categories of fitness. to date with all the success we had, including tripling revenues, that's been largely in the u.s., you can think about geographic expansion, we have enormous demand from customers

to seat bell the bike and provi services. i will help the team drive momentum. >> you talked about growth, john foley, i talked to him yesterday, every other word out of his mouth is growth, new products, new content, new medium that takes capital. where will that come from? >> you can expect us to pursue capital. and nothing is off the table in the next 12, 24 months. we're afforded that opportunity because of the great growth and this unique business model with the subscription piece. not a lot of consumer companies launching are able to yield that kind of monthly subscription. our stat is 97% of our riders are still with us after a single year, which talks to the strength of the product. we'll have a lot of opportunities as it relates to capital and funding an ambitious plan. >> can i make sure i understand the product?

you sell a bike, i put it in my apartment or house, there's live classes that i can watch on a screen, so i don't have to physically go to spin class. i can do spin class, which i love, i do a lot of it, if i have one of these bikes in my house. >> you got that largely right. what's so disruptive about pe peloton is it brings spin class into your living room with on-demand content. you have 12 hours of live streaming a day. >> if i do a live class -- >> it's tradition for "squawk box," when you have a in product, to bring in samples. >> to take home. >> if he would have brought a sample in for the anchors -- >> how much would a free sample cost? >> honestly -- >> it's a pricey bike. >> today, 7 to 10 inches of snow expected in new york t would be the perfect day for it. you wouldn't need to get in your car. there's a lot of friction going

to the gym. >> how much is the bike? . the bike is $2,000. >> how much is it a month for a monthly subscription? >> 39.99, which if you're taking -- >> every month? >> yeah. >> cheaper than spins. >> whethat's where you make you money, the subscription model. >> you have all kinds of live streaming content. you talk about not being just a bike company. will we see new products? the peloton rower or elliptical? >> the big announcement today is john appointeding me. you can expect us to be aggressive in terms of product announcements. >> so not just the bike? >> no, we view it as a fitness platform. the media component makes it unique. connecting people who want to get fit and healthier with the top fitness experts around the world. >> we get a lot of guys who come

in, they have great companies with tremendous growth but fail to manage the growth what are you doing to make sure you don't end up like one of those guys? >> i think we're being careful about our bets but being aggressive. the company is honing a single product in a single geography, the u.s. john brought me in, we have a great team. the company is now 400 people. bringing in smart investors. the company has great investors. bringing in experience. >> it feels like a company getting ready for an ipo? >> that's not being announced today. >> again, john -- >> or not announced. >> john foley said it is not off the table. he said go online, we have a big piece about the ceo talking about the possibilities. >> i covet a peloton.

a ali velshi has one. i ask him about it. >> i have one. >> it's an exciting product. the nps score, net promoter, i believe for peloton is 91. the iphone, a great product is 65. so, peloton -- >> it's people recommending it to other people. >> exactly. it's a measure of would you recommend this product to a friend. >> thanks for coming. >> thanks, diana. >> sure. coming up, from fit tech to thin tech, the ceo of person to person payment system circle will join us next to talk regulation, cybersecurity, and how technology is changing the financial industry. as we head to break, a quick check of what's happening in europe right now. we are to the upside a bit more definitively than earlier this morning.

♪ time now for the executive edge. fin tech and mobile payments are becoming increasingly important for the financial sector. regulators still grappling with how to monitor start-ups and digital currencies.

joining us now is founder of one of these start-ups, ceo of payment app circle. jeremy, good to have you here. >> thank you. thank you very much. >> first, i want to make sure i understand your business and that our viewers understand your business. it is a new one, relatively speaking. i'm on the website. sounds like i sign up, i take a picture of my debit card, and then i can send money to anybody i want, anywhere in the world. >> that is absolutely what we're trying to deliver to consumers. we want to make money work the way that the internet works. we can send and receive e-mails instantly, globally, for free. we don't think about what e-mail service someone uses. we just know it works and works instantly. that works for how we share content and how we communicate on the internet. we want to do something similar for consumers with how they exchange value. we're the first sort of social payment app in the west that allows you to do this and do this not just across the table with someone who you're paying back in dollars but across the

pond to someone who might use pound sterling, or across the eurozone. >> what about the chinese yuan where there's a walled capital account and they don't amount capital to flow across the borders freely? >> actually, that's not quite accurate. they do. they allow consumers to move around $50,000 a year for specific purposes, like sending a kid to college. so we set up circle china. we're working on a way to connect folks that use apps like we chat to folks that use other messaging apps and payment apps in the west and allow dollars, euros, et cetera all to flow freely. >> and that's happening right now? >> we haven't launched the chinese product yet, but that is a major focus. we have quite a few strategic investors from china as well. >> it says only debit cards on your website. you can't do via credit card? >> in the u.s. it is limited to debit cards. that's because we provide it as a free service. credit cards -- >> so that's not regulatory. >> that's not regulatory.

it's really about, you know, people who have a bank account, it's the fastest, easiest way to link that account and then fund payments and receive payments very, very easily. >> so if you allowed credit cards, it wouldn't be as profitable because they take such a big chunk. >> it's like 3% fees. fundamentally, like moving e-mails is free and moving text messages is free, we think moving money should be free. we think over time technology, like block chain technology, will reduce the cost of moving money to the same cost as moving data. >> this is so millennial. they want everything free. >> jeremy, take a person like me and bring me up to speed. across my desk every couple weeks a new company comes out says they're going to revolutionize the payment system. seems like the technological advancement is all over the place. rather than coalessing around a couple ideas, it seems like it's widening around more and more start-ups. >> that is definitely true.

i think what you're seeing is the realm of software move into the realm of paper based industries, finance being one of those, payments being one of those. and you're seeing trends that have maybe been established in emerging markets like china, such as social payments, which is dominant there. 500 million, 700 million people using it there. there's virtually nothing in europe. you're sort of seeing trends coming in. you're seeing a lot of software powered companies coming in. >> in order to work, doesn't the market have to coalesce around a few ideas that become standards throughout the industry? >> very much so. and that's why when we founded the company, we were betting on block chain technology. really, what's needed is we need protocols, open protocols that everyone can agree to that run over the internet, that actually make things instant, low cost, secure, et cetera. it's what we've been able to accomplish in how information is shared and how communications happen over the internet. we need to have those standards

emerge around finance. you're seeing a lot of activity around that in particular. >> jeremy, thanks for joining us. interesting. good luck with the business. >> thank you. appreciate it. coming up, twitter is set to report. we'll bring you the numbers and reaction. stock is up just 1% since the november election. our guest host will be venture investor ben lerer. he says we should think of twitter more as a media platform. "squawk box" will be right back. ths elovmis pehourll ers. on e trk anou m rsod, bre b2clicbl ci s c atabt eryine omiralywhereakngm..

vihe he a estion abo bkerage f sp& n. becaneno &e

ike r atwa,thquess?ur brothe one at schwaiserg?rte

earnings alert. twitter and coca-cola roll out quarterly results. the numbers and stock reaction

coming up. airline ceos are inbound for the white house. executives of united, southwest, and jetblue will meet with president trump today. we'll tell you what's on the agenda. plus, looking for love in all the online places. >> pedro, just listen to your heart. that's what i do. >> we talk the business of match making with ceo of eharmony as the second hour of "squawk box" begins right now. ♪ >> live from the beating heart of business, new york city, this is "squawk box." loving spoonful? >> i always get stuff wrong on tv about music. >> good morning and welcome back to "squawk box" here on cnbc. becky and joe are in pebble beach. they got a snow day out there. they're going to join us live from the links with a big lineup of guests tomorrow starting at

6:00 a.m. eastern time. lucky them, they got out of the snowstorm today. our guest host this morning is ben lerer, ceo of group nine media. we're going to hear from him in just a bit. he knows everything about technology. let's get a check on the markets and futures right now. dow would open higher by about 38 points, the s&p by a little more than 4, the thnasdaq highe by a little more than 6. coke just out with earnings. sara eisen joins us live. >> that strong dollar certainly hurts coke's business around the world. here are the headlines. earnings per share was a match. 37 cents was the expectation. revenue beat for the fourth quarter, $9.4 billion versus 9.1 billion expected. the real bright spot in this report is actually organic revenue growth. coke putting out 6% for that number for the final quarter of the year.

expectations were just a little over 3%. i did just talk to the coo, james quincy, the incoming ceo. he doesn't want to overplay that number because he did cite two extra selling days during the quarter. that actually helped those revenue numbers look better. still, he said they had a very good experience in terms of growth on north america. that was certainly the bright spot while emerging markets continue to suffer from macroeconomic problems. the joint venture on that premium brand he cited as doing pretty well. sprite had a good quarter. the bottled water and juices and teas continue to grow. that's going to be the trick for coke, getting more of its portfolio into that category versus carbonated beverages. but they are seeing this strategy to sell smaller packages, those small cans of sparkling beverages like coca-cola. they say it's working.

10% growth in smaller packages during the quarter. as far as what else drives the growth, i want to mention that a lot of it was pricing versus volume. so for the quarter as a whole, volumes actually declined. it's all about getting more money for those smaller cans of coke, more money in places like north america. that's really helping. in terms of the guidance, i'll just mention it did come in light on earnings guidance. that's a big part because this is a company that's refranchising or spinning off some of its bottlers. that's going to impact earnings guidance in the year ahead. and currencies, of course, a big, big story. they also got hurt a little in emerging markets by the india demon teization. we'll have a conversation with james quincy about how he'll continue to try to keep this growth going from the fourth quarter and get this stock turned around. it's been lagging over the past year or so. >> yeah, it has. thank you very much for the rundown, sara. appreciate it. now we have to get on to

twitter. fourth quarter results hitting the tape. the stock is down. julia boorstin has the numbers. >> coming in at 16 cents per share. revenue of 717 million, short of projectio projections. analysts looking for 740 million. user numbers, obviously a very key metric, coming in at 319 million. that's pretty much right in line with expectations. it's only 2 million more than the last quarter. in q-3, the company added 4 million monthly active users. i think the reason the stock is down 6.5% now is the earnings forecast for q-1. it's far less than expected. the company projects earnings between 75 million and 95 million. wall street expectations had been for 191 million. i spoke to ceo jack dorsey. he stressed that the company is seeing accelerating average daily active users led by

product improvements, saying he's seeing the changes they're making are working. the daily usage grew 11%, an acceleration from 7% in q-3. i asked coo anthony nodo about reasons for that revenue shortfall both this quarter as well as in terms of projections for q-1. he said there are a couple factors at play. revenue lags audience, and they need to catch up to the improvements they're making in the audience. he also said they need to simplify theired a product portfolio. he also said it's just simply more competitive, that they're competing not just with facebook and snapchat but also with youtube. there's a lot of competition for that video ad inventory. now, i asked about whether they're seeing any impact from president trump using twitter as his primary means of communication. nodo said that the president using twitter raises awareness and has a qualitative impact on

the company but is not having a quantitative impact on the numbers just yet. but it's possible there will be more impact down the line. i think we're going to hear a lot of focus on this revenue question and what the company's going to have to do to be able to ramp up its revenue in the earnings call. that call begins in an hour. guys, back over to you. >> julia, i want to make sure i understand this. you explained why they believe they had a revenue shortfall, but the guidance you were talking about is a profitability shortfall, correct? do we have any explanation why? are they going to invest more? or is it less revenue? >> i think it really comes down to less revenue. they didn't give us a revenue number, but i think that they're going to be investing and making those changes, such as cutting back on certain ad products, but they didn't give a revenue guidance number. i'm sure there will be questions requesting one. if you extrapolate back, it's going to come down to the fact

the revenue is just not growing as fast as they would like. they say that the core trends in terms of audience are there, in terms of the daily active usage numbers, which will eventually drive revenue growth. but we're not seeing it just yet. >> julia, i want to understand the sort of tale of the tape here. i've got fourth quarter, i guess, nongap net income in terms of the metric that the market follows of 119 million. they were expecting -- the market was estimating or forecast that would go up to 191 million. but in fact, twitter says, you know what, it's more like less than half of that, 75 to 95 million. that's a massive change, right? >> yes. basically, they're saying that their earnings in the first quarter are going to come in about half of what wall street expected. >> and just for the record here, the gap net loss was 167 million, for those who still like to follow as i do, standard

accounting rather than the whatever you want to call it accounting. it was $167 million net loss. >> for anybody who hoped they could post results that could potentially spark new interests in a takeover, that's dead, right? that looks like it's dead at this point. >> there's a lot of speculation that president trump using twitter so heavily, all the media attention on his tweets, would have a real meaningful impact on their results in this past quarter. but they're really not seeing that yet. i think it's really interesting. we're focused on that monthly active user number. we see dramatic growth in monthly active users at instagram, at facebook. but twitter is barely seeing any monthly active user growth. 2 million new monthly active users in q-4. they're saying and have stressed repeatedly they don't care about monthly active users, but they're not revealing daily active users, just usage growth.

so that would be positive, but we don't have the hard numbers to know how many people are using the service on a daily basis. and we're not seeing that yet translate into revenue. >> thank you very much, julia. let's turn to ben lerer here. he runs tech companies, builds tech companies. twitter is a mess this morning. >> look, about the takeover bid thing, i don't actually know that anyone taking them over is doing it because they're really impressed with their revenue. at the end of the day, i think the product has a meaningful dsh -- >> but there's a difference between a sinking ship and one that's stabilized. >> from a user perspective, i think twitter has a role that is very well carved out for it. i think it's a big part of communications. i think it's a platform that matters. but -- and this isn't a surprise. i don't think one of these quarters we're going to wake up and suddenly twitter is going to become this incredible business. it is what it is. >> speak to what i think is the essential conflict here.

one of the most popular new media that's out there used by the president, checked obsessively and compulsively serb certainly by a big part of the population, and they're not making money. >> i think where the big money is, is in video. that's where facebook is going. that's where google is going. that's the big opportunity for disruption to ultimately take money from television. twitter does not have a great video product. they're investing a bunch in live with the stuff they're doing with the nfl, really trying to get into that. that's where the big dollars are going to be. that's not what the platform is built for. >> we had ann on. she said twitter is not a company. it's a product. >> and that's what i mean about the numbers not being all that important from a sort of revenue or profit perspective. it needs to be owned by someone who treats it as a product within a portfolio. i thought the disney conversations that were happening or rumored to be happening were interesting, the idea that a big media company with a ton of video assets would try to find a way to treat it as

a product and not have it stand up to the expectations that everyone has. people want it to be this gigantic -- they want it to be facebook or google. it's not that. >> no. ben is sticking around for the hour. >> we'll get more on twitter later on. meantime, back to the broader markets. joining us now, senior global equity strategist at wells fargo institute. and gabrielle santos. good to see you. scott, i'll start with you. we peak in mid-2017. then what happens? >> well, then -- >> what does that peak look like considering we're close to record highs. >> i think the peak is going to be a little higher. the top end of our target range is 2330. i think we peak there. maybe a touch higher. then i think headwinds set in. those headwinds are going to be worries about wage inflation in 2018, about the federal reserve maybe being behind the curve and having to catch up. our work suggests that that's going to take a little wind out of the sails of the market.

net-net from here, i don't think we're going to see much change at all. those headwinds, we have a lot of proposals out there, a lot of could be and what ifs. for us, that's a 2018, 2019, 2020 story. no way 2017. gabrielle and i were talking about these growth rates that people are throwing around out there. 3%, 4% this year, 4% plus next year. that's not going to happen. >> you don't think the market -- the rally that we had seen from november to, let's say, mid-december when we start to stall out, was that built on 4% gdp? >> i think it was built on two things. it was built on the economy we already have, which is one that was already accelerating in the second half of last year, globally even. and it was based on some hope of some policy implementation. and i think some of that was expecting a little bit of a bump to gdp closer to 3%, let's say. this year even.

and that's not something we think is tangible. i think if you look out further to 2018, 2019, there was some hope that perhaps we'd have more consistent 3% growth. that's just not something we believe we'll necessarily have. >> what do you invest in? do you go financials, things that are under loved? >> we would stick with what was working the second half of last year, which was much more the cyclical sectors. financials was a key sector. this is not based on speculation of policy change. yes, it would be nice. nice icing on the cake to have less regulation. but it's based again on the economy that we have, which is one where credit is growing and where the fed is going to raise rates. >> scott, same question to you. >> i think there's very little, in my mind, trump premium built into this market. i think it's fair value right now. we've been leaning toward these cyclicals, financials, consumer discretionary, industrials. we continue to lean toward those. even though we think this is going to be more of a flattish

stall type of year in the market, we're not calling for an end to the cycle. so i think we're leaning the right way. if some of these proposals work a little quicker and in enough magnitude than what we expect, i think we'll be okay. >> all right. good to see you both. all right. coming up next, twitter just out with its earnings. we talked about that. we're going to dig through the results even more with an analyst. plus, senator mike rounds on the future of dodd-frank and financial regulation. and later, let's make a match. the ceo of eharmony will be here. stay tuned. you're watching "squawk box" on cnbc. of ne yotatereot

twitter just out with earnings. the stock is getting hammered. down 9%. joining us now on the squawk news line is analyst james cakmak. their guidance for next quarter, they cut their profitability by half. any idea what the problem is? >> essentially, it's demand issue. if the users aren't coming, you won't have the eyeballs to monetize them and draw in more ad dollars. it's just a cycle which is great when it's going the right direction, but it's terrible when it's not.

the one thing that -- you have a headline number that did miss the street. it does look like year over year growth. if you drill down further, advertising revenue for the first time declined year over year. this is a seasonal high period during the peak election and political season. really, this is a tough one to spin. >> this is very important. steve liesman was telling us an anecdotal example during the break. >> maybe i'm behind the times. my band playing at garcia's tomorrow night, if you're interested. regularly it has for several years advertised on facebook. we have tried to advertise on twitter. we know the demographic is younger there. we just can't figure out how to do it. >> that's a big issue, but on top of that -- >> not just us then. >> no, it's not. it's an issue we've heard from advertisers across the board, especially the ones that don't have the hand holding from ad agencies. even the ad agencies tell us

that twitter is more a litmus test to gain advertising effectiveness, the concurrent usage of tweets during tv ads, for instance, versus actually being utilized as a destination for ad dollars. so i think we're seeing it not only in the results today but the fact only users were up 2 million quarter over quarter. >> james, a couple questions on the guidance. is it unusual for twitter to not provide revenue guidance for the upcoming year? in terms of cap ex was that expected to be between 300 and $400 million in 2017? >> on the guidance issue, i'm not that surprised with that because once revenue did start to show those declines in the growth rates, they did switch to an ebitda outlook with more

qualitative commentary around revenue. and your second question? >> the cap ex line. >> i'm not that surprised by that. that's kind of within the target range. one thing i'd say, i really think twitter needs some type of intervention. i don't believe that -- >> what does that look like? you put twitter in a room and yell at them? >> no more heroin. >> no, i mean, it sounds crazy, but that wouldn't be such a bad thing. i don't think they fully appreciate who they are, what they want to be because they're trying to be everything to everyone, throwing dollars, a lot of dollars at trying to do licensing deals for premium live video content. but in reality, maybe it should just be a mixed service and monetize in that capacity. you know, we've seen this before, at least at the board level. we're not seeing a lot of signs

as it relates to prices they'd be willing to take for an acquisition. the best-case scenario for twitter is to operate in a larger operation. >> we've had that discussion with our guest host this morning. he agrees with you. james, thanks so much for joining us on twitter, which is getting hammered this morning. >> thank you. all right. coming up, let it snow. a storm slamming the northeast. a live report coming up next. and tomorrow on "squawk box," don't miss this. becky and joe are live in pebble beach with a massive, terrific lineup of news makers, including discovery communications ceo, at&t chief, all of that starts at 6:00 a.m. eastern, which is like 3:00 a.m. on the west coast. leg. yekse a al movingithipas. noi st bke my le nos a lllo min thatoneyrom.ae work noi st bke my le mighmiss i out

bu. noi st bke my le heus thay owple.ah heth ce lo'veo, i le with mut' r lifee th with...

heth ce deable, e's nothere. lo'veo, i le with mut' vendermapem motony er, re peececla, ou, r ts r o

er, rekn thiuddet th veomething... ou, r tsse f around, ia ♪ a winter storm hitting -- slamming the northeast right now. cnbc's craig melvin joins us now. what's it like? >> i don't think he knows he's on television. >> craig, you're on tv right now. hello, craig? >> craig can't hear us.

>> craig doesn't know he's on tv. i can tell you there's a lot of snow out there. >> it's snowing. >> we have a negative tilt to the front, which means it's wrapping. all these cool weather words i'm really into. >> melissa raised a very good question. twitter, very bad earnings report, or at least guidance. what does it mean for snapchat? >> it's interesting. sn snapchat, there's a bunch of comparisons, where they're saying does it look more like facebook, look more like twitter? >> looked more like twitter when it went public. >> i personally believe the platform is -- i think it's going to end up looking more like facebook. >> why is it less nichy than twitter? >> i think part of it is just the format. i think it's built for moving image. it's really built for video. >> so you buy into this whole snap as a camera company? >> i do. and that video is going to be a

much more valuable place for advertising than not, essentially. >> steve, say that same story about how you advertise on facebook. >> it's very simple. we go on facebook, click for users who like the bands that we like. >> steve is in a band. >> we see, do you live within ten miles of the bar. and we write an ad and pay per click. we've never been able to figure out how to do that on twitter. my guess is we can never do that on twitter because they don't have enough information about the average user. >> can you do that on snapchat? >> i think off the bat that's going to be something they're going to have to develop. right now one of the limitations for snapchat is you're going to have to make a video asset or snap asset to run within that ecosystem. on facebook, type up a few things, put up an image, and you're off. on snap, you have to create something that's a little heavier. >> going back to the valuation question, what does it do? what do these results, if anything, do to snap's valuation as it goes to public market? >> it depends if you want to be in the bull or the bear camp.

you can decide to layer this on snap and say that it's a problem, or you can say that the companies are very different. they're doing different things. they're reaching different audiences. >> and that's your camp. >> that's my camp, yeah. >> all right. now, craig melvin, we think he's good. you ready, craig? >> reporter: craig melvin is good now. it's not just twitter that's getting hammered this morning. it's the northeast corridor taking a wallop. we're here in central park. yesterday you were outside probably at some point. we're talking close to 60 degrees. what a difference a day makes. now we are looking at potentially record snowfall. parts of new york expected to get somewhere between 8 and 12 inches by the time it stops. schools have been shut down in boston. schools shut down in new york city as well. a number of other states working on delayed school openings, but

again, look around central park. you're probably seeing folks running behind me. some dogs also out and about. but by and large, snow has really crippled much of the northeast this morning. 2300 snowplows have been deployed throughout the city. some 315,000 tons of salt being employed as well. but here's the big story. lots of folks who are trying to travel, take a look at this misery map. this is flight aware's misery map. if you look at the areas in red, those are the areas that are already affected right now. that is expected to only get worse throughout the course of the day. some 3300 flights have already been canceled. that doesn't even include the delays. that's something that'll get worse throughout the day. that domino effect that we typically see when you start cancelling flights in major metropolitan areas in this country. but snowfall in new york city.

winter at some point, i suppose, was bound to show up, right. >> hey, craig, the forecast was for 8 to 12 inches in the area where we are right now. and all the way up to boston. given how this storm has developed this morning, do you have the over or the under on the 8 to 12? >> reporter: i would take the under right now. but you look at some of those other places, boston, philadelphia also getting hammered pretty well, i take the over in some of those places. but it's interesting because it started maybe two, three hours ago. at first it was just kind of ehh. now it's really starting to come down pretty heavy. one of the things that continues to amaze me about snowfall in new york city, especially here in central park, these people aren't deterred. i like to go out for the occasional jog, but never in a blizzard. it's the strangest thing.

people in new york city who decide no matter what, they're going to go out for their run. as i'm having this conversation with you, you'll see one of these snowplows going behind me. >> it's a city full of type as, craig. that's who moves here. i bet you self-identify with that. >> reporter: god bless them. >> he's with the "today" show, if you can't tell by his hat. craig melvin. >> reporter: give me a cnbc hat. i'll wear it next time. >> send one right over. busy morning for corporate earnings. dow component coca-cola matching estimates with profits of 37 cents per share. revenue came in above street estimates. however, the outlook is lower than expected. that stock is flat essentially at this hour. certainly not positive. twitter's quarterly profits came in 4 cents above estimates at 16 cents per share. however, revenue was light, as was the company's current quarter outlook. the stock is off nearly 9% in

premarket activity. and viacomm reported quarterquarter ly profits of $1.04 a share. its spike network is being rebranded as the paramount network. yum brands coming in 5 cents above estimates, 79 cents per share. revenue came in below street estimates. however, its same restaurant sales were up 1% short of consensus of 1.7%. up next, democrats are preparing to battle over president trump's push to roll back dodd-frank. republican senator mike rounds sits on the banking committee. he'll be here next. musis route d er00rsgo as beark for ag manyple ild portos sategies that er00rsgo as juck theenrks.ag inveg isn' abt achig aver inscbelidog at t a achvioa.

good morning. welcome back to "squawk box" here on cnbc. we're live from the nasdaq market site in new york city's times square. president trump will meet with u.s. aviation executives today. among those expected to attend, the ceos of united, southwest, alaska airlines, and jetblue.

the agenda includes america's ageing airports and regulation in the industry. the president's controversial immigration order is also expected to come up. democrats digging in their heels ahead of the battle to dismantle dodd-frank. joining us now with more on this, south dakota senator mike rounds. he sits on the senate banking committee. good morning, senator. >> good morning. >> so give us an idea. the president talked about cutting out a lot of dodd-frank. he called it a disaster. what's your appetite for changing this regulatory reform law? >> we'll take it either piece by piece or look at a major piece of legislation. depends on what works best. it's a 2300-page bill to begin with. any bill that's that large is never perfect to begin with. you've got to be in a position to make changes. they've not allowed in eed any over the last six years. our recommendations are that we

should take a look at it in a business-like manner and figure out how we can make capital more affordable to folks that need to borrow money. right now the challenge is banks are always going to be able to make a profit, but they do it at the expense of consumers. consumers are the ones that pay the bill. so if you've got regulations in place to make it harder to borrow money or if you make it so that the cost of money is greater, it all comes back down to what's best for consumers. we think the dodd-frank act has made it more difficult for businesses to be able to borrow money. that mean when is you're trying to set up a business or grow a business, capital is more difficult. >> so senator, have you alonged at the data? one of the things that supporters keep saying is, you know what, lending growth and commercial banks is pretty solid. about 7%. when they look at the nfib survey, they say, you know what, very few small businesses are complaining about the lack of availability of capital right now. so it's sort of hard to say s y

statistically or in the data. where's the problem? >> if you look anecdotally at what individuals are telling us, is there's money available, it's just a matter of qualifying for it. in the central part of the united states, south dakota as an example, if you want money for a home, you can get an inexpensive rate, but trying to qualify for a mortgage is sometimes next to impossible simply because the appraisal rules and so forth make it very difficult to actually qualify for those. so what we're talking about is let's simplify it. let's get rid of the stuff that's not necessary. let's allow those banks that have got money to lend, allow them to do it. rather than telling them how to do it, tell them what the rules are. >> senator, let me make sure we cover this other area here. over in the house, the head of financial services had a bill last year called choice act. simple capital ratio, raise it up high, and you don't have to deal with the regulators. didn't find a lot of love in the

senate. will it now? >> i think that's one we're going to take a hard look at. he also wants to repeal the volcker rule as part of it. the idea that you actually go to a bank and say, look, here's a safe harbor. if you want to leave more capital within the bank, you can get rid of some of the regulatory excess we've got out there. that's one option. it's one that i think we'll take a hard look at. >> a lot simpler. senator, michelle here. other topic, kind of related, the bordered adjustment tax. you on board? >> not at this time. any time we're moving stuff back and forth across the border, it impacts farmers and ranchers, one area where we want to have good export opportunities. but you're also talking about folks that are consuming in the united states that have benefitted from the inexpensive imports. you're really talking about a major change in the united states in terms of who pays the bills. so any time we start talking about how we're going to regulate products going out and products coming in, we better

darn well know what the impact on the economy is before we start making major changes. >> all right. i'm going to check the box. i try to ask every republican congressman. >> senator, thanks for joining us. please check in as this dodd-frank reform debate rolls around. thanks very much. >> we're wide open. we just want to make it better than what it is today. >> awesome. great. coming up, twitter shares are under pressure. we're just off the session lows, which was down 11%. we're just there right now. much more about the future of the company next, in the next hour. an interview you will not want to miss. former microsoft ceo steve ballmer will be here at 8:00 a.m. eastern time. stay tuned. ul wh shall youto ne ! shsh tee hieserageeearnpotentl . e? wh shall youto ne ! shsh tee hieserageeearnpotentl . , it'a gi. ofgirls e to yoowi'm ay, a m gi rick re comom #

aldot ght.

sunc c i pickckro ranccompany. t reir get tlba udg ec an h t e lituicy, you for mui-liist, viou m on ur c an h t e lituicy, an cage. fr qte today. dsityou™.

let's get back to our guest host, ben lerer. i want to ask you about the tech world's anger about the trump immigration order. i read the brief filed and signed on by more than a hundred of these tech companies. it is a wonderful homage to immigration. it's beautiful. but it isn't very clear about why they need this immigration from these seven countries for the next 90 days. they seem to totally discard any

concerns about national security. >> well, i don't think -- i think it's probably not specific to these seven countries. i think it's sort of -- a lot of it, i believe, is done on a moral ground, not necessarily the idea that a huge percentage of their employees are going to be affected by these specific seven countries. but i think these are companies that are generally led by sort of liberals. they employ lots of young people. there's a ground swell of support obviously for sort of fighting this ban i think within these companies. i believe that they're stepping up and sort of participating in this conversation because -- not about these seven countries, but they don't this to become something where the country shuts its boarders and the u.s. and what we stand for changes. >> do you really believe that? the rollout was a mess. first they detained green card holders. they didn't mean to do that. now when you read the government's brief, they say we didn't mean for current visa holders who are outside the

country to not be able to come back in. they admit they blew the rollout. now that we know all those categories -- okay. limiting seven countries for 90 days is down a slippery slope to closing the borders? >> yep. i think so. yeah, as far as i'm concerned, it is. you know, all the data that i've seen sort of trying to highlight why it was these specific seven countries and their ties to terrorism as far as i'm concerned are pretty loose. i'm just not -- i don't support it. i think the ban is not something that we should be doing as a country. so personally, it's hard for me to sort of -- i don't think that's what's going to make us safer. >> can i switch gears? >> yeah. >> something completely different. >> sure. >> we had a gentleman on earlier from circle talk about fintech. can you give us the lay of the land? it seems like every week or so

some new company comes out that's going to revolutionize the payment system. i can't get my brain around all these different products that are out there. i have a credit card in my wallet. i guess i use paypal once in a while. i'm not a hip -- venmo is another one. how is all this developing, ben? >> to be honest, fintech is not my sort of area of focus, but there are is a lot going on in the sector right now. >> it's amazing. >> look, and fintech, like any other market, there's a bunch of gigantic companies that have been successful for a long time that aren't really built for sort of this next mobile generation. so i think when you look at the banks and the way the credit cards have been built, you look at the fact that all of these banks are built where you actually are physically going into -- you know, you're actually physically supposed to

go in. the entire banking system is not built to serve the needs of young people who think differently about their money, who think differently what they should be able to do on the fly. that's the broad opportunity, which is to build products for a new generation that doesn't do business the same way. >> money is a medium. similar to the way a newspaper is a medium. it's a way of transferring or exchanging things. it's going to change in ways we will not probably recognize it five years from now. it's just that nobody's agreed on the standard. what's happening with block chain is probably the biggest advancement and probably the place where it's coalescing. >> it's a space with a lot of regulation for obvious reasons. it's going to take more time for disruption to come than might happen in media or in retail or in other businesses. it's money. you have to be -- it's going to take more time. of course, everything -- any business that has not been wildly flipped upside down by technology and the internet in the last 15 years, totally flipped upside down, is going to be in the next 15. >> speaking of disruption, in

terms of tv and how we watch tv, netflix had another record high. does that necessarily mean it's going to be the winner? >> i love their business. i think -- >> there's hulu, there's prime. >> look, the whole ecosystem is clearly being flipped upside down. netflix has -- is able to invest so much money in original content because their subscriber base is so robust. what is it, $6 billion a year in original content, i think, is what netflix is able to invest. >> so deep pockets make netflix a winner. >> it's content. >> apple could be the winner by doing that. >> apple could be. so could amazon. deep pockets matters. it's not in apple's dna, i don't think. but money could help. >> ben is sticking around for the rest of the show. coming up, online dating service eharmony is responsible for 4% of all marriages in the u.s. what a stat. the ceo will join us to talk about the business of love and

the competition from apps like tinder. that's next.

for most people, valentine's day might mean unsealing a card or getting a box of chocolates, but it's time to make some serious money. joining us now is ceo of

eharmony, which is most successful when people are falling in love. grant, welcome to the show. thanks for taking the time out. this is your peak season. >> this is it. >> christmas to valentine's day. >> the day after christmas people go home, their mom says, why aren't you with someone? their sister is married and happy. they say, i got to do something about this. then comes new year's with new year's resolutions. then valentine's day. it's kind of a convergence. >> for people who aren't familiar, your site obviously wants to match people up, but your questionnaires are much longer. how long on average do they take to fill out compared to some of your competitors? >> well, we tend to have a questionnaire that's about 140, 150 questions. >> wow. >> and the reason we're doing that is because we need to know a lot about you if we're going to match you for reasons that matter in a relationship. >> and you say -- you're showing the website there. 438 marriages a day, so 4% of marriages in the united states. do you track how long these marriages last? >> we have done research to

understand how successful -- >> this could go off the rails so quickly. go ahead. >> so a couple years ago we did a study with harris international where we looked at people that got married over a seven-year period. couples that met on eharmony had a little less than 4% divorce rate, which was the best of the lot. >> can i ask a very simple question? are you putting together like people or opposite people? some of the better marriages i know, they're opposites, not the same. >> here's what our research tells us. when people are similar in fundamental ways, foundational ways, that they have an easier life together because they have less compromise and the relationship tends to do better. that doesn't mean they have to be similar in every way. in fact, when you say they're opposite, you probably mean in some less foundational ways, more superficial ways. >> i mean some people more

likely to say yes and the other person less likely to say no. >> about what topic? >> going out at 2:00 in the morning or something. >> that would not qualify as something that we see -- here's an example of something that's pretty important in a relationship. ambition. if both people have very different ideas of what is appropriate in terms of ambition, it's a friction point in the marriage or in the relationship. now, you're not going to break up because of one friction point, but as those things build up, you get a tipping point. >> how about politics? how important is it they're simpatico? >> if they're only lukewarm democrats or republicans, it won't be an issue. >> there's no such thing anymore. >> less so. >> is it increasingly important then? >> one of the things that we've seen since november 8th is a boost in business that looks similar to what happened after 9/11. i was working at eharmony after

9/11, and our business -- we stopped advertising because we weren't sure what to do. but i think people just didn't want to be alone during that time. so our business took off. we've seen similar rates of business and communication between people. >> i'm not surprised to hear that. i went to the doctor last week, and the doctor communicated to me that they've seen an unimaginable amount of people who are physically sick from stress because of what's happening in politics. >> in new york city. >> in new york city, right. take that for what it's worth. >> how important is money in putting people together? >> we just got a piece of research about this last week. when you ask men and women what's more important, love or money, 76% of men say love, 66% of women say love. so love is more important, but it's less important -- money is less important to men than it is

to women. another interesting fact, when you're putting people together for a long-term relationship, money is more important to women than if they're just looking for more casual connections. you're building a life together. you want to be with someone who has some earning power. >> i have a nonlove related question for you. in terms of the technology. obviously it's not just a questionnaire. you're not just -- how has big data changed how you're matching people? are matches better these days because of the technology that's available to you now? >> we started off with 450 questions. 15 years ago. so that will tell you that over time as we get more feedback and more real experience, we've been able to hone that thing down and make better matches with fewer questions. but in general, you know, the information we have on people is so intense. obviously we have demographic data. we have psychographic data because we're putting them through this questionnaire. then we have behavioral data because we're watching what they

choose to do. so those things let us sort of tune the system for whatever outcome we're trying to achieve. if we want more people to communicate, we can match people in such a way that they will communicate more. >> fascinating. >> i like this. it's interesting. >> thank you, grant. appreciate it. >> that was fun. coming up -- thanks for coming. former microsoft ceo steve ballmer. he's fun too, and he's doubling down on the facts. he's here at the top of the hour to explain. plus, former secretary of defense william cohen on president trump's new world order. stay tuned. we'll be right back. somes they jusn. ris anpte oprtunun enable u choe

earnings alert. quarterly results from some household names, including coca-cola and twitter. a "squawk box" news maker. former microsoft ceo steve ballmer joins us with details on his newest venture. here's a hint. it involves keeping the government accountable. plus, horse heirs. we'll go inside the secret lives of the super rich, visiting a show jumping competition with the daughters of steve gates,

michael bloomberg, and bruce springsteen. the final hour of "squawk box" begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." good morning. welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. you can see all the snow behind us. i'm michelle caruso cabrera along with melissa lee and steve liesman. our guest host is ben lerer. futures are in positive territory right now. treasury yields, last we checked, were moving lower yet again. this has been very curious. the rally we have seen in bonds and the decline in yields over the last several days and what does it mean. look at that ten year. 2.35. solidly below 2.4. among today's top corporate

stories, coca-cola earnings matching estimates but a weaker than expected full year 2017 outlook. results continue to be impacted by the stronger u.s. dollars. shares down by 1.9%. coca-cola ceo james quincy will join us at 10:30 a.m. eastern time. meantime, twitter revenues missing the mark. the company is now giving a current quarter adjusted earnings outlook that falls well short of analyst forecasts. that stock is getting hammered. viacomm earnings and revenues beating the street, also announcing its spike network will be rebranded the paramount network. cvs health's bottom line was helped by the pharmacy benefit management operation. and yum brands, profits beating the street by a nickel. revenue and same store sales short of consensus. that stock managing a slight gain premarket.

now to our news maker of the morning. steve ballmer. he's looking to make america great again through excel spread sheets. a new venture. usa facts. he's building a transparent database of government spending similar to a yearly 10k that public companies have to file with regulators. he joins us now. good to have you here, steve. >> it's fun to be here. >> in case people don't know, he's the former microsoft ceo and owner of the l.a. clippers. andrew apologizes. he's really sick. i know he's supposed to be doing this interview, but you're stuck with me. i want to get to your government transparency position right away, but first, were you at this game last night? >> i did watch that game last night. i was glad to see the outcome, despite talking to new yorkers. go clips. >> so what would you do -- so everybody's waking up this morning and they see that charles oakley was thrown out of the game, arrested for

insulting. you took over a team that was mired in scandal when you got the clippers. any recommendations for what they should be doing this morning in the wake of the scene that everybody saw play out last night? >> i didn't see the incident. i don't know anything about the details. i'm sure that'll get taken care of in a proper way. it's certainly unfortunate to see that kind of issue between an owner and a player, but we'll see where it all goes. >> you have any advice for jim dolan? it's a publicly traded company. what should he be doing today? >> i think he'll probably start through the legal process, whatever that looks like, as will charles oakley. as an owner in the game, i'd like to see things move forward appropriately, but also amicably. >> okay. tell me about government transparency and how you're going to achieve it. >> well, we started work on a project, usa facts, about two

years ago. my wife got me ginned up as we were talking about our philanthropy, to really understand the biggest philanthropy in the world, which is the u.s. government. it occurred to me as i started probing around the internet that if you really want to understand where the revenue comes into government, where the money gets spent, and probably as importantly, what outcomes government achieves, not just the federal government, but state and local, it's really hard to figure it out. i went looking for something like a business 10k that put that all together so i could come back to my wife and really explain what the government was doing, in part because i wasn't sure how much energy i wanted to put into our philanthropy. what i found was kind of a mess. so i took on this effort with a few other people to try to bring the information together. we're talking about the need for that at the ftedx pennsylvania

avenue conference today. probably around april we'll have a chance to launch and hopefully communicate to citizens where their tax dollars are going and what kind of outcomes are being achieved. >> what's it going to look like as an interface? am i going to log on and see what? can i ask it questions? >> yeah, you'll see three things. first thing is literally a 10k, the same way a business would write for its shareholders. you'll see the equivalent of an annual report, short and long. and you'll have a website that's got a lot of data on it in which you can post queries, trace down the issues most important. we brought together over 70 different government sources. we only use government data. i believe and trust in the facts that come from the government. we just want to lay historical facts, no forecast, no prediction, no blah, blah, blah. just the facts of what's happened. >> steve, i want to switch gears, if we can, and talk about

twitter. you're one of the largest shareholders. last time you were on the show back in october, the stock was actually higher than where it is trading now. back then you also said you would not want to be an owner of twitter. what's wrong with it right now? obviously you see or have seen value in this company. what is going wrong here? >> well, i think the number one thing to observe is the volatility in twitter stock. it does move up. it does move down. i was glad to see earnings per share were up in a nice way. users were up in a nice way. and people do have some concerns about revenue. i think the company's got to absolutely make more progress. every day it's got to make days worth of progress in terms of innovation and new products. but i still think there's a very valuable service that twitter builds. i have confidence in it. >> so you stand by twitter. you are one of the largest shareholders. you have the ability potentially to agitate for change, to pick up the phone, call jack dorsey. what do you tell him at this

point? obviously you can't be happy that the value of the stock is going down. you can't be happy -- you know as a former ceo it's all about the forecasts. the forecast for profitability in the current quarter was horrendous compared to what was expected. >> you have to look not at what's expected. you have to look according to what's happened in the past. same idea we have about usa facts. forecasts are forecasts. they're not really usually very good. look at the past. can we beat the past, can we move forward. i have some confidence in the company, but every time i talk to jack, the message is we need more, more innovation, move, move, move, get the cost base right and move forward with the innovation. >> we got a guest host today. ben lerer, ceo of group nine media. >> just back to the usa facts thing. i love the idea. i'm just curious, how much cooperation do you have to get from the government and from different agencies to actually make this real, and when it launches, is the idea that it is

complete or is it sort of the beginning of now getting a bunch of new sources and this is a living, breathing thing? >> well, we actually don't require any explicit human collaboration with the government. good thing about the united states, as citizens, we pay our taxes and government gives us a lot of data back. we're just using official published data. we don't need anything else. i think when we launch, you're going to see something that is quite comprehensive. yet, there are more things already i know we want to add. we're not going to have full data built out at the state and local level. we'll have aggregate state and local level information combined. we'll want to give you state-by-state data and a lot of other stuff. we'll have a 10k that's over 150 pages. we will have a database that is rich with, as i said, sources -- 70 different sources across the

government. >> steve, what got you going on this? sounds like something lit a fire under you and you found some need for some information that would change the public debate in some way. walk us through what got you going here. >> well, originally, to be fair, when i stepped away from microsoft, i told my wife connie, hey, i can pick and choose what to do here. the clippers were coming up for sale. she said, come on, dude, you're going to spend more time with me really working on the issue we've identified, which is the fact that there are many kids in america who are born into a situation where they have little opportunity to think about the american dream. i said, come on, the government invests in that. you've got education. you've got transfers to help support people who grow up in disadvantaged conditions. and she said, no, philanthropy can do even more. it got me thinking, i wonder what really the government does

do, and that led me into a broader exploration because of who i am. i'm a numbers guy. >> so is your suspicion here that through this database people are going to find out the government is doing a lot less than they think for the money or a lot more? >> actually, my overall conclusion is a lot of things seem to be better than the popular view, and many things also seem to be somewhat worse than the popular view. now, that's my opinion. other people might have other opinions. >> can you give an example? >> pardon me? >> an example of each. >> yeah, i think if you really take a look at it, most people think the government is, quote, a bunch of bureaucrats. if you really look at it, what with government does, its employees, they're teachers, they're policemen, they're firemen, they're military. people that i think most americans would say are valuable contributors to society. it's not just, quote, a group of

bureaucrats. i think if you take a look at it, people will be surprised what the department of transportation thinks about the quality of infrastructure in the country, which is something both sides of the aisle are now promoting big investment in. so i think people will find some startling facts, and people will also say, hey, there's some things which just need to be debated. my hope is people debate based upon the real numbers of what's happened in context, not some blah, blah, blah. >> i want to make michelle angry at me. it's been two hours and it's been going on great at the table here. the problem with talking about a 10k for business is government is not business. in fact, government is government specifically because it's not business. we give stuff to government to do because business won't do it, because there's no profit

involved. so what worries me about looking at government in a 10k format is people are looking for the profit. but there is no profit. when you create a law, there's no profit. when you give a passport, there's no profit there. we give it to the government because it's not business. >> yeah, i agree with that. there are some things government does that is business, but that would be like running garbage and sewers, et cetera. but you live in a world with government -- what we're trying to do is maximize outcomes. how well educated is the populace? how safe is it in society? how well are we prepared for potential war? what does that look like? but it is subject to some constraint that revenues and expenses need to be roughly in line. so you're right. that's why our focus in our work isn't just on the revenue and expenses.

our focus is on the outcomes by which government should be measured. >> steve, when you hear or you read on twitter a tweet from the president saying we have to bring costs down on things like the new air force one or the f-35. it sounds like you would agree with him on some of those measures. the notion that government needs to look hard at what they're spending and what they're getting in return. have you spoken to the president about this? do you know in he's on board with you? >> no, i haven't spoken to the president about this at all, but the issue isn't precisely what's going on or what should go on, rather. it is understanding what is actually going on. how much money are we really spending on foreign aid? how much money are we really raising from corporate income tax? people really need to understand these things and the context of the bigger picture and the president can decide what he thinks is important, various legislators can think about what they think is important.

every citizen, hopefully, from a grounded numeric factual basis can decide what they're interested in. just the facts, just the numbers. >> speaking of the president, what do you think of the job he's done so far? >> well, that's really, again, not the issue on which i want to opine. i want to provide people information to take a look at these things. frankly, most government data sources are a year or two behind. they're not going to help with any immediate assessment about how this president is doing. >> all right. can i ask you to opine on another area, that would be jack dorsey. you said before him being ceo at both square and twitter was not an ideal situation. given the trajectory of the stock and the company's profitability, do you still stand by jack as being the right person to head twitter right now? >> i'm going to stand by the notion that says running two companies is probably not the best idea. and i'll stand by the notion that jack's a very creative,

innovative guy as well evidenced by the fact he started two amazing companies. who can do that? that's very tough. both twitter and square. i give him credit for that. i think now is a time for him to focus down at least from my perspective on the stock i own. >> and one more question on the issues of the day. if you were still the ceo of microsoft, would you have signed on to this brief protesting the immigration ban? >> ironically, i'm not still the ceo of microsoft, so i'm not fresh on the issues. i think that two issues are being put together here. one issue is specifically what should or shouldn't be the situation with respect to seven countries, and i think that set of checks and balances are going on. the president acted from the executive branch. now the judicial branch is picking it up. the other issue, which is mostly unrelated, is what should our immigration policy look like for

high-skilled workers. i'm the son of an immigrant. i do believe there's value to having immigrants come into the country. and on the other side, i do believe it's important to have reasonably secure borders. i'm glad that dialogue is playing out. >> mr. ballmer, thanks so much for joining us this morning. pleasure to have you here. thank you. >> just the numbers, just the facts. thank you. all right. still to come on "squawk box," former defense secretary william cohen, he's going to join us to talk about world affairs. plus, secret lives of the super rich. we're going to bring you inside a look, an exclusive horse jumping competition that features daughters of the world's most famous billionaires. then late r, tech and president trump. josh baer will be our special guest. stay tuned. you're watching "squawk box" here on cnbc. y rl,we he onbout ur brokera fees. fees wh d he in m i . $6trade?

hh-i wafeomgr broker guaee?? whe wean g ourees and commmmons ckif w notpy. italthe qutis?k bker thri 5 online ey tr a satiactionrant if le answ, 5 onagain y tr a satiactionrant if lederecters no o way to say it's o i'veer, we a permanent esrftlbalaedny it's r sees, our arts ring as.. knowudden,s, our ar s: oug as.. omng ke.seu ougiia

good morning. welcome back to "squawk box" on cnbc. let's get you caught up on how the markets look to open right now. the dow looking to add about 26 points at the open. s&p looking up about 20. nasdaq by about two points. the nasdaq has been on a streak, setting a new record high just

yesterday. making headlines this morning, dunkin' brands posting better than expected earnings and revenues. the donut shot operator also increased its quarterly dividend by 7.5%. a federal judge has blocked a proposed $54 billion merger fen anthem and cigna. they will review the opinion and evaluate its options in accordance with the merger agreement. coming up, coca-cola rolling out quarterly results this morning. we'll get the street's reaction straight ahead. stay tuned. you're watching "squawk box" on cnbc. bili iimant toe.

eepsy ins llbile.en wn i'mon tove.

coca-cola out with fourth quarter earnings early this morning. shares down by about 2%. joining us is stephen powers. great to have you with us. it was the forecast, wasn't it. what was behind that shortfall? >> yeah, it was the forecast. the quarter itself was actually relatively strong, especially on the top line versus what investors had expected. but it was the guidance, as you say. the street, investors were expecting next year's earnings to be flat to modestly up. the company has guided to them being modestly down. there's a lot of moving parts in that guidance.

the biggest drivers of the lower eps are going to be nonoperational items, higher interest expense, higher taxes, and a bigger drag from ongoing restructuring at coke. the underlying momentum in the business is pretty well in line with expectations. it's those below the line items that are going to be driving eps a bit lower next year. >> in terms of the u.s. dollar, what are you forecasting this year? that really dinged the results. >> and it has for the last several years. we've had 20% to 30% cumulative head winds the last couple years. next year is going to be another year of 3% to 4% negative impact on earnings. so that's about in line with what our models had forecast. but it's clearly another year of a headwind for coke. >> any reason to own coke right now? >> yeah, look, i think when you step back from it, they're doing

a lot of the right things. they've got a lot going on, but they're doing the right things. i'm supportive of the management changes that coke is undertaking, including at the ceo level. they're doing the right things with their portfolio level, moving away from carbonated soft drinks, moving toward healthier, better performing beverages. they're rethinking prices and promotions. you see that in a strong price mix results this quarter. i think that continues. and the restructuring they're undertaking, which is causing them some pain in the near term where they're essentially rethinking and revamping their manufacturing and distribution system, what they call their bottling network, essentially across the globe. that is, in the long run, a really good and constructive thing for coke and for shareholders. so i do think in the long view, coke remains a very compelling opportunity. >> got it. stephen, thanks for joining us. >> thank you very much. >> the incoming ceo of coke will join us later this morning. our guest host this morning

is ben lerer, ceo of group nine media. for viewers who haven't seen you before, you're a guest host here a lot on "squawk box." group nine does what? >> we are a media holding company. so we -- for the last ten years, i was building a company called thrillist, which is a media brand focused on the intersection of food, drink, and travel, helping people do the stuff they love better. last year we went and merged with three other businesses. one called now this, which is the leader in social news. another brand called the dodo, which is the biggest animal brand in the world today, actually. and another brand that was owned by discovery communications called seeker, which is a science brand. we put all of these brands together to actually create what we think of as sort of a digital version of a discovery or a viacomm or a time warner. >> you live off advertising revenues? >> we live off advertising revenues and increasing off of licensing revenues.

actually starting to sell our content to distributors. >> got it. okay. cool. staying for the rest of the show. steve? all right. coming up, breaking economic news. weekly jobless claims are straight ahead. plus, we're going to talk global affairs and the impact on the world economy and markets. former defense secretary william cohen is coming up. y neighi whwhwy . re outs compx e i broughtn foon? we, yocoulgeppom thinkorswim'-app lyochat a share you reen dtly re outs compx e i broughtn foon? we, yocoulgeppom wiive peon from thapp,sooneeeeco thinkorswim'nypp sot ab motivation meerkat -app cw at ametrad

welcome back to "squawk box." rick santelli here live on the floor of the cme group. the latest read on initial continuing claims. dropping darn close to what's the lowest level since 1973. that level would be 2.33, which we have seen recently. this is 234,000, which means it's a drop of 12k from last week. on continuing claims, a bit of a one-week timeline difference. 2.078 million. that comes from basically a whisker above 2.06 million. the story continues to be let's

watch what global rates are doing. let's assess why they're moving a bit lower. now down nine basis points for the year. 227 is where we closed the year before. many believe we'll ultimately test that long-running consolidation pattern. certainly trying to digest all the issues of the day and of course that one foe that always shows up to get a black eye. politics seems to be at the epicenter of everything, whether it's the markets or the world stage. we all stay tuned closely. back to you. >> rick, they're pricing out march as a rate hike. is it possible the market's too on one side here? >> i think trying to price what's in janet yellen's mind or the rorschach statement or advice that comes out in the press conference is even beyond the reach of smart markets and investors. i don't think it's our

grandfather's fed funds arena anymore. if you want to look at it the same way, i think that could be right, but it's it's a living and breathing indicator, like all markets are. as the notion of what the fed will do will ebb and flow, you'll see those move up and down just like any other equivalent rate reflecting what the fed may do. >> all right. thanks, rick. let's move on to geopolitics now. general james mattis wraps up his first overseas trip as defense secretary. our next guest, a former pentagon chief himself, tells us the global challenges. let's bring in william cohen, former u.s. defense secretary, now chairman and ceo of the cohen group. cohen introduced general mattis at his first confirmation hearing last month. we're really glad you're here. >> thank you. >> let's just talk about general mattis and what kind of defense secretary you expect him to be,

especially vis-a-vis the president. >> well, i expect him to be exactly who he presents himself. that's a skilled and veteran warrior but also a great student of history. i expect him to bring a great sense of gravitas to the office, a man having been in many, many bloody conflicts, knows the pain of war and of losing people, and is going to be one of the last ones to recommend the use of force unless it becomes necessary. so i think he'll be a very calming influence within this administration. i think he'll have a great deal of credibility with the allies we need in europe, the allies we need in asia, where he's just returning from. i will point out, i'll probably be seeing him next week in munich. there's a security conference at which will be one of the most important because all of the nato countries will be there. many countries as far as singapore and elsewhere will be there, along with 12 united states senators, including the vice president. so it's going to be a very big

conference. he's going to be there to reassure our nato allies that they're not obsolete, that they do have to do more, but that we're with them. we have the greatest military civil institution that's ever been created, and we don't want to see that taken down. >> secretary cohen, i was looking the other day, and it turns out, i believe president trump is correct that other countries are not paying their fair share when it comes to nato. they're supposed to be spending something like 2% of their gdp on defense, and they're just not doing it. why has this been allowed to go on for so long? >> well, that's correct. as a matter of fact, the first trip i made to visit my nato colleagues, i said they had to do more. we were carrying much too much of a load. i know that secretary rumsfeld gave the same message, as did bob gates. so this is something that's been

perennial. the european countries have taken advantage in terms of they're supposed to contribute 50% of the costs of the nato operation. we're now contributing about 73% to 75%. so president trump's insistence they do more is real and it's necessary. but by the same token, we never want to convey the impression that what we have is a mercenary military. in other words, we will come to your defense if you pay us. we are not in europe. we are not in asia because we're being paid to be there. we're there because it's in our national security interests to extend our defensive perimeter as far as we can in the world with like minded allies and insist they pay more. so it's a constant battle. >> i want to pick up on that. i have to say, when i think about the foreign relations of the trump administration, it does sound very economic and more mercenary than perhaps

we've had. for example, our relations with mexico. we can talk about the economic relations, but at the same time, from a defense standpoint, a stable and prosperous mexico is in the u.s.'s interests. are they thinking broadly enough within this administration, or are they too narrow when it comes to thinking about everything is a dollar and cents relationship? >> one of the complaints i've had is mr. trump, president trump, is a businessman. as a businessman, he's an opportunist. opportunistic is really a compliment to someone who's successful at it by picking a deal and seizing it. that's different than being in a government, the head of a government that actually has global interests. you can't do it one by one ad hoc. it has to be within the context of an overall, comprehensive, geostrategic strategy. when you take action in one

place or say something applying to one place, it doesn't upset the other relationships you have. so that's something i think will come. he is new to the job. he hasn't had this experience. he's been in charge without having to get consent from anyone else. it's a different game now. >> sir, if i could ask you, the president is tweeting this morning. he's criticizing senator john mccain. just a little background for our audience. there was a raid in yemen that went poorly. reports that children died, an american service member died. john mccain said negative things about that. this morning donald trump says, senator mccain should not be talking about the success or failure of a mission to the media. only emboldens the enemy. he's been losing so long he doesn't know how to win anymore. just look at the mess our country is in. bogged down in conflict all over the world. our hero -- and we're still waiting for a third tweet, i believe. there's a dot, dot, dot, which usually signals there's more

coming. thoughts? >> well, there are so many elements in that statement. number one, the president of the united states should express an apology to john mccain for what he said during his campaign, saying he wasn't a hero. john mccain was and continues to be a hero to millions of people in this country and well beyond that. secondly, i don't believe john mccain is in any way denigrating the loss of life of a s.e.a.l. team member. if anything, john mccain understands the costs of war, having been in it over the years. third point is, it appears president trump is saying that we're engaged in places all over the world. well, that seems to indicate that he wants to come back to america, which is something that george mcgovern was saying back in 1972. come home, america. that to me is dangerous when we're signals to countries that we're retrernching. that you're on your own. if you don't pay up, don't look

to us. i think we have to take care in terms of don't go after john mccain. john mccain has dedicated his life. his father, his grandfather all have served in the navy with great distinction. so don't look at it as a complaint against mccain. by the way, president trump, don't forget what you were saying during the course of the campaign. you were criticizing our military as being woeful, incompetent. the generals didn't know what they were doing. i think that requires an apology to the many men and women who are serving in our military. so we ought to put that aside, accept it for what it is. a raid took place. it was not successful in being carried out as was planned, but that happens. that happens in every operation. mistakes take place. equipment breaks down. let's not get bogged down on one incident. the man who died, the s.e.a.l. who died, great tragedy. >> terrible. absolutely terrible. secretary, thanks so much. >> okay, pleasure. coming up, business heiresses face off.

an exclusive look at a horse jumping competition in miami. that's next. stay tuned. ♪

ac new york atfrom long islandof om rer thuonvalleyfry eaescees e lo taxsinvestment,ong islandof

are eang aonr ececomanright env. t uselgrow you toow daat esdy.gov ececomanright env. welcome back to "squawk box." we have an inside look this morning at an exclusive horse jumping competition on miami beach featuring the daughters of the world's most famous

billionaires, including georgina bloomberg, the daughter of michael bloomberg. >> reporter: horses jumping over these six-foot-tall fences on the beach are worth lebillions. jennifer gates, her dad bill is the richest man in the world. for gates and jobs, it's a friendly rivalry, much like their dads had for years. and this is serious business for georgina bloomberg, daughter of billionaire michael bloomberg. he's watching her ride from the vip section. >> every rider at every level is going to take a couple falls a year. it sort of comes with the sport. i've broken a lot of different bones and had a lot of injuries, but it's something that's always made me stronger. >> and georgina came in third in that competition, winning a grand total of $50,000, which

probably will pay for her hotel stay down in miami. but this is probably the most expensive sport circuit on the planet. the horses can sell for up to $15 million. there's not a lot of prize money. so when you look at the costs of getting into the competition versus the prize money, the expenses, the outfits, keeping the horses, they all have multiple horses, you really do -- maybe not a billionaire's daughter, but you have to be very wealthy or have a good sponsor to play in this game. but it was really interesting that the daughters of steve jobs and bill gates, who had obviously this competition in real life, their daughters are now competing in a separate arena. but more friendly, of course. >> was bruce springsteen there? >> bruce springsteen was not at that competition, but his daughter is a big competitor. she's a big show jumper. she's often there. bruce springsteen and his daughter have had places in wellington. they have ranches. bill gates has spent a lot of money to buy ranches in california and florida for his daughters. but yeah, the bruce springsteen

thing is jarring to some people because he's so blue collar. >> from a bar in new jersey. >> but his daughter, they've been on the circuit for a long time. boy, you talk about real wealth in a small setting, you know, it's incredible the people, the parents, the billionaires in that small circle. >> robert, i don't know how much you know about the horses. we race 3-year-olds but we jump 8, 9, and 10-year-olds. but you said $15 million for a good jumping horse. what's that market like? >> the breed they use is a specific breed for dressage and horse jumping. the really prize horses can sell for between $10 million and $15 million. georgina's horse was mid level. that's maybe a $1 million to $2 million horse. you have a whole stable of eight to ten horses you're always working on. it's not just the one horse that's $10 million or $15

million. of course, the saudi sheiks were in this competition as well. the horses can help you win, but they don't guarantee a win. >> is this just a depreciating asset? >> yes. >> that is so melissa. >> i just wanted to understand. >> it's instantly worthless. >> it's also a lovely animal. but yes, a depreciating asset. >> that's terrible. >> i was wondering if there was an investment. >> put in that way, so are people. we're all depreciating assets. >> people who know robert frank know what a real sort of down to earth guy he is. then he sort of walks in this world of wealth. >> i'm a chameleon. >> like you belong there. >> it's fascinating to me. it's interesting. >> it's a good story. >> i don't have an agenda. the names are interesting and the people are interesting. >> he came in with a handkerchief in his pocket or in a t-shirt. >> get more of robert tonight.

don't miss his all new "secret lives of the super rich" at 10:00 eastern and pacific time. >> depreciating asset. >> i was wondering if some of these billionaires were investing in these horses because there's an aftermarket. >> they're just a cost. >> they're live animals, for god's sakes. >> i live in new york city. what do i know about horses? tech leaders are reacting strongly to president trump's policies. more than 100 tech companies, including facebook, google, and microsoft, have signed a joint brief to combat the executive order on immigration. joining us from austin to discuss the tech community's response is josh baer. great to have you with us. >> great to be here. >> the tech community certainly provided a united front. more than 120 ceos signed on here in terms of the battle against the executive order. in terms of dealing with the trump administration, who do you like more in terms of style, the way elon musk has dealt with trump or the way travis kalanik has dealt with trump? >> i got to admit, i'm a big fan

of elon musk. the way he's handled it has been spot on. he's handled it with real class. he stood up for the principles he believes in, yet he's retained a seat at the table where he can have influence. he's the model we should all look up to. >> is it disappointing to you that someone like travis would give up that platform, that access to the president? i get that he's got customers. i get he's got employees. at the same time, he had this real opportunity to try and advocate for change from the inside. >> here in austin, we have some history with uber. i think this is just another example of them kind of mismanaging the political structure and being a little bit too little, too late. they should have been more up front with it and stuck to their principles as opposed to being so reactionary. >> in terms of what you do, what exactly is capital factory, and how do you see trump administration policies either hurting or benefitting your constituents? >> sure. capital factory is the center of graff if i for everything entrepreneurship in austin. me, i help people quit their

jobs and become entrepreneurs by introducing them to their first investors and customers and employees. so all i do is talk to start-ups and entrepreneurs and tech people. then we invest in them and help them grow. tech people, it's really hard to get them involved in politics. they usually don't care. but immigration is something tech people care a lot about because it has such a big impact on us in the short term and long term. >> it's interesting that you said tech people don't really care about pollitics in general. it seemed like the tech community was very political in backing hillary clinton from the get go and here in trying to battle this executive order of the trump administration. you're still not political? >> i think this is an example of them getting more political and getting more involved. traditionally in the past, i think most people felt the tech community has been absent sometimes and not always had a seat at the table. it's great to see them stepping up. that's how you can tell this is such an important issue to them. >> josh, we have these we works places here in new york city. it's filled with all these kids

in the summertime. they're in cargo shorts. they're all in start-ups. it feels like peak start-up when i walk through those places. this is a fad almost for young people. tell me why i'm wrong. or am am i wrong? >> look, it certainly is cooler to be an entrepreneur than it's ever been. but it's been a fad for the past 20 years. it's only been growing. and all the trends to me say that it's going to continue to grow because everything's working in our favor. it's just getting easier and easier to create a company and create a start-up. it's cheaper than ever before. there's more knowledge and more information sharing than ever before and it's really been democktized. so we're going to see more and more start-ups, more innovations and people be able to build businesses on their own instead of following a traditional path. >> i bet it's easier to fail too, but that's another story. >> josh baer, capital factory. when we return, jim cramer joins us live from the new york stock exchange. you're watching "squawk box" on cnbc.

veess theil ok.m d ins-tre con- s anldkets. veloac 24/ me atatee do, veloacthen ian fat iant o. vit aruturtoday.co t ad tus ou. ere, ialof tninma tff tt matters?the stesre shi, how youol ts? you don't. u rtr thm that vis governmee fo and,ivernsighterson son, ♪een erearscece u rtr thm that vis governmee fo ers you.morgtanley

bchchor arainx was d, loeol bu wi sategierainx was e be. but stg ist hievav e arexpeis g.and o o evoi thadas -conn g. anslatn? time for your kensho stat of the day, what are the top performing sectors in february? the materials, energy and consumer discretionary sectors lead the way.

let's get down to the new york stock exchange, talk to jim cramer. jim, twitter's getting hammered. >> look, no revenue forecast. ebitda big decline. not being able to keep up advertisers with the daily

average users, which is really a shame because, i mean, the actual quarter itself was i thought pretty good. but the forecast is so dismal that i don't think anyone wants to get ahead of this freight train. >> is there no hope for the thing? >> no. i don't want to say that. i think that there's someone better to monetize it maybe out there. it's not that big a company. i think maybe the market cap doesn't fit the size of what the company can accomplish. i do believe that the content is such that maybe advertisers just aren't that crazy about it. although when you do the kind of formal content, like the nfl, i think they can get behind it. but i got to tell you, there was an upgrade yesterday and that upgrade -- >> oh, it was bad. >> it was an ill advised upgrade. >> yeah. it was bad. coca-cola, what do you think? >> look, it's a 2018 story. i know it's not easy since it's february 2017, but they're doing this franchising going to coca-cola light, so to speak, where they'll only have 20,000 employees. they're kind of offloading the

bottlers. the plan is a good one, but it's going to take some time. in the interim you've got the dividend. but it's not something that makes people say, you know what, i have to own the stock of coca-cola. new ceo going to be on later today, but i think that the story's not as dismal as the stock as opposed to twitter where i think the stock actually reflects the dismal nature of the story. >> what else is coming up? >> well, you know, i'm taking a look at -- we forgot whole foods. i mean, whole foods last night was a quarter where i think they recognize there's a lot of competition and they got to pull back. and i've been waiting for a lot of retailers so say, you know what, we have to pull back. that's what you have to do at this time. figure out where your most profitable stores are and get out of the others. i salute whole foods for making that move even though it's very tough as a growth stock to be able to admit, you know what, we don't have the growth. >> all right. everybody tune in. jim's going to be on in how many? five minutes. thanks, jim. >> thank you. >> later on "squawk on the

street," as he said incoming ceo of coca-cola james quincey ahead. stay tune. r. ound anentcapem mona outsbut theyay: if youlove somg seit free.e ou, gi ♪ ound anentcapem mona i ent are mous titor ani ow a thi utra. so ira wi*e ra ttitor get f thut t t so ira wi*e ra ttitor n' giv oe te ppom oho

tire d alwa worng tter. i'm rn, tht'f w' at, amokoney, f tore d alwa worng tter. i'm rn, tht'f heth. en is tgezereit'me tgevo tore d alwa worng tter. i'm rn, tht'f

our guest list this morning, the ceo of group nine media.

ben, you're actually in town for a board meeting. >> well, i live in town, but i was just whining my first board meeting is later this afternoon for group nine and i'm going to be tired before it. >> discovery invested quite a lot last quarter. >> yeah. discovery put $100 million into helping us create group nine, which is sort of this family of brands we've put together. >> why? >> well, very broad strokes i think the belief that we have is there's an opportunity to what's happening in social media with facebook and with twitter and instagram and snapchat and google, i believe these platforms are the future of content distribution similar to the mvpds and sort of the rise of cable television. and i think there's an opportunity to build the cable networks of the future on these pipes. and so what we've done is take a family of brands that are built expressly for social, short form video creators that combined have enormous scale -- >> can media companies exist in both spaces successfully?

>> i think they can. i think that's part of the relationship that we're trying to build with discovery is actually thinking about how you merge linear and that world with digital. and that's what group nine's all about. >> cool. >> good to have you here. >> thank you guys so much for having me. >> make sure you join us tomorrow. "squawk on the street" is next. ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. pretty steady premarket as earnings from twitter, coke, vie come, yum, all compete for attention with the ongoing debate over supreme court nominee gorsuch, the insertion of nordstrom. treasuries on their longest win streak since june. roadmap begins with continuing ceo