"squawk box" begins right now. ♪ ♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. yesterday the markets did end up not at the levels we had seen at this time of the morning yesterday. we had seen the markets up by 240 points in the premarket. by the end of the day, the market was up by 72 points s&p by over a point. the nasdaq up by nine. this morning things look mixed with the dow giving background it's down by 34 points below fair value the s&p 500 and nasdaq indicated positive s&p up by 4 points same thing with the nasdaq treasury yields.

that's something we've been watching so closely. and right now the yield pushing up once again for the ten-year, 2.741% 30-year at 2.967 the two-year, 2.165%. facebook posting better-than-expected earnings, but users spent less time on the social network in the latest quarter. the number of daily users in north america also dropped for the first time shares initially dropped but then recovered on the conference call the cfo saying they are maintaining the 2018 expense forecast and suggesting the tech giant would benefit from a weaker dollar in the first half of the year. we'll talk about this in a minute >> what stunned me was the amount -- they said 50 million user hours a day which is only 5% which tells you about how much people are using facebook >> i see that as a positive.

>> for society >> for society millennials -- >> it's not just millennials >> go experience life. you supposedly experiential life don't experience a screen. >> you need to do the experiential so you can -- >> put it on facebook, so other people can experience your experience >> fomo. >> mofo? >> fomo. >> the market was negative yesterday. >> at one point, yes >> when that happens after being up 200 -- >> 240 at one point. >> you wonder will it continue monday and tuesday then it does the head fake and closes positive. >> next week, we are up against a potential shutdown of the government again i knew that would happen schumer is mad

we have to figure this out, whether he buys the dip or not >> oh, whether the sorkin family buys the dip >> no, in general. we're waiting for the pullback you never know >> the technician yesterday said 2700 who wants to buy at 2%, if it's going down 8%, 9%. then the market thinks you know that, it doesn't go down, it goes up. then you miss it >> it's the double reverse psychology >> double secret probation remember the name of that college? faber college. >> faber college >> the brain >> the brain >> we should tell you this morning that microsoft reporting a 6$6.3 billion loss in its second quarter related to a tax payment related to profits held overseas adjusted earnings beating forecasts by 12%.

at&t's fourth quarter results topping estimates helped by tax cuts and the addition of 300,000 new wireless customers randall stephenson is confident at&t will complete its acquisition of time warner the justice department sued to block the deal a trial is set for march that's going to be a big story over the first half of 2018. some other stocks to watch today or that might be interesting, a lot of this is based on results qualcomm posting a fourth quarter loss on charges related to the u.s. tax law and an antitrust fine from the eu the company's first quarter outlook is below estimates it's down 1.5% paypal is trading lower after ebay announced its going with a new primary payment

processor. a lot of ill litratithat ebay will go with a dutch fintech startup when the relationship with paypal ends. pa paypal's latest revenue topped estimates. >> ebay also reported fourth quarter results, revenue during the holiday period topped estimates. focus on marketing attracted more shoppers. shares are trading higher this morning. i used to love "animal house" and faber college. >> what happened it's always funny. >> when you have a child entering college, those frat parties, they seem much less -- they seem dangerous to me. alcohol, it's not funny. not funny.

now i'm -- it's like we need to get a whole on hazing. all that >> i agree >> wait until the twins are -- >> still got a few years >> i just thought about that strikes fear in my heart >> this is why i was like i never wanted autonomous cars, until i have a daughter driving age, now it seems like a good idea >> remember d-day would take a beer can -- >> the 13-year-old, the shopping cart, they took the girl -- she was like 13, 14. >> were you branded during college? >> branded was a good -- did you ever see that -- what do you mean >> a fraternity -- >> being branded >> were you a frat brat? i was in a fraternity. sigma pi

>> you were gdi -- >> tappa kega brew >> was there a secret handshake? >> in the '70s i thought those guys were square i wish i had done the greek thing. >> okay. let's talk washington news are we making headlines this morning. congressional republicans are on retreat in west virginia ylan mui joins us from there good morning >> good morning. lawmakers say they still have a job to do, that's why they're pushing forward with their retreat out here in west virginia even after yesterday's deadly train crash some members of congress are also doctors, they were liter literally the first ones to respond to this accident they said there was a loud bang-on the train, a slam. the lights went out, then when they went outside they saw some of the wreckage that had occurred ohio representative brad winstrop was one of the people to first reach the injured

>> when you think about what could have happened that makes it tougher yeah, we had a fatality. that's bad enough. but when i think about the fact that this train did not derail, and that everyone really on board was good, that gives me great solace >> representative jason lewis of minnesota has been released from the hospital after suffering a concussion he did make his way here to west virginia to continue to participate in this retreat. gop lawmakers had a packed agenda today they'll meet with white house officials to talk about defense, foreign policy, tax reform, and even infrastructure. president trump will be addressing lawmakers this afternoon over lunch while this is a republican retreat, there's been an outpouring of support from both sides of the aisle at least one republican said that's put some of the infighting in washington into

perspective. >> you know, washington -- partisan washington, d.c. climate, sometimes i think some of us start to lose that, what really is important in life. and this incident today, i think, brings that back into focus for everyone we will see if this does, indeed, open up a new chapter of bipartisanship once they get back to washington back over to you >> yeah. that was unfortunate could have been worse. we're thankful for that. thanks let's check the markets. joining us is jamie desmond and matt toms, chief investment officer of voya investment management it's your lucky day again matt you're relevant again.

2.74 on the ten-year things are happening finally after years of waiting around. lucky you stuck with that. >> absolutely. starting to see volatility tick up across the markets. that tells us this could be a sustained move volatility in equity markets and fixed income markets has changed. it's not falling back after this bounce higher in equity. this looks more durable than past selloffs. >> interesting you're talking about equity. you're a fix ted income guy. do you think the volatility in equities is indicating rates may be one that is sustained and gets through prior resistance? >> both equity levels. the vick at x at 13 and other ff volatility have bounced higher it's the correlation of multiple markets. look for currency markets to experience that. when you see multiple large markets lining up like that, it

can be the sign of a more durable change >> i've seen comments here and there that volatility always, when we use it now, it seems to -- we only seem to use it when we're talking about negative, downside with stock prices we use the vix so much, volatility invehicldex seems to correlate with breaks in market. i understand what you mean when you say volatility can be up and down, but we use it more when we talk about the downside. is that weird that it works that way? you can have volatility going up, can't you? >> you can perhaps that's a good thing. when there is volatility, people see that as a chance to enter the market >> how much does this correction that started on monday, if it is one, what is the percentage basis and the time horizon

>> going into this year we didn't expect to be up more than 10%. to get halfway there in the first half of the year is a surprise also that 200, 300 point down days, i don't know if that's true volatility. investors are waiting on the sideline waiting to invest, i expect more volatility between now and the end of the year. >> if you were a big bull for your clients, you were predicting a good 2018, wouldn't you really have a good january than a bad january >> make you feel -- >> historically that's a good sign after a big year last year torque start off january like that, i would be surprised if it's a down year >> january is a good indicator on how the year will go. >> so overall you figure we are much flatter for the next 11 months

>> i believe we'll see pullbacks and moves forward. so i think we'll see more volatility than in the past. >> matt, do you have a year-end for the ten-year do you look at the rates do you look at bunds as well >> we do importantly the selloff in rates has been global. so the bund curve has moved higher the ten-year at 70 basis points corresponds with the u.s. move higher look for the end of the year, beginning of the reduction of qe in europe to be the meaningful second step to this monetary policy globally starting to abate. that will allow interest rates to move higher and less dollars floating around the system should allow volatility to peak higher >> so the fed moves, what's ten-year -- >> we should push 3%, and it's hard to see a lot of velocity

beyond there unless inflation rears its ugly head. 3% is the next natural target. >> what's 3% do to stock prices? moderates the gains? >> we're seeing more return on a dividend basis coming out of the equity market. so investors are still looking to get yield in some places other than the bond market >> it used to be there was no place else, you have to go into yields, bonds are so low, then yields start going up, people are worried about holding bonds. so we're going into stocks >> you're buying stocks both ways, it seems even with rates going up, it makes you go into stocks you are worried about holding the bonds you already have >> a lot of investments in the united states are with our retirees and their psyche is to think they should be in bonds. >> i saw the fund flows for the last week, it was massive

inflows into bond funds. >> that's been consistent throughout the last two, three years. >> even a outflow in u.s. stocks >> jami never heard of voya. are you thinking goya? >> no, voshya, with the rabbit n squirrel you paid someone to do that, to put it in my head. and it worked. bye. see you. thank you. when we come back, dazed and confused, maybe. an analyst brings us the inside line on facebook after the company gave investors a case of whiplash in after-hours trading. think your large cap equity fund

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revenue for dow beat forecasts, and the company raising its estimate of cost savings from

the dow due pochupont merger, ty expect a split in companies 14 to 16 hmonths from now. . royal dutch shell says fourth quarter profits more than doubled and that beat forecasts. the company benefited from the surge in oil and gas prices as well as cost-cutting measures. nokia reporting better than expected fourth quarter results which were boosted bay one-time patent payment by huawei the company said while the network business will remain weak, a potential increase in spending by customers could lessen the decline pandora is cutting 5% of its work force and take other measures to cut costs. pandora says the move will result in annual savings of $45 million. let's talk facebook.

they smashed earnings estimates, but the stock whips on this is the first release after mark zuckerberg vowed to fix everything joining us is james wong good morning to you. >> good morning. >> so, first time we've seen the hours decline in a meaningful way. >> yes >> they say they will control expenses keeping guidance where it is what do you make of this >> amazing quarter everybody came in thinking they'll change the algorithm, will they still gain the attraction of users and make the earnings numbers we saw, yes, for the first time daily users decline, but if you look at the financials, it's amazing how little that affected the operating profits. >> the other piece of this to me when they first announced, yes,

we'll do these other things, clearly they must have known to some degree that it didn't really matter. even if they lost these customers or the hours, it wouldn't hurt the bottom line. >> they knew ahead of time they knew on some metrics it would matter the new the daily active user engagement was going to decline. but it declines ever so slightly down 10 basis points year over year when you look at the actual pricing power they have on the a ads, a few quarters ago it was thought ad load would be an issue, but as the ads came down the prices went up if you're an advertiser you have no place else to go. >> you have google, facebook and then some other guys but the quality of ads on facebook is so extremely high. that gives facebook incredible

pricing power. people talk about the bad things in the quarter, but two numbers this quarter were the best in nine quarters straight one is this dollar per price number that increased 43% with facebook you don't have to do anything and increase your ad prices 43% and advertisers will pay. what do you make of the story over the weekend of the fake followers that celebrities and others had, the ability to buy followers. it was really in the context of twitter. i wonder if that will bleed into other spaces >> i think that's always been a problem. twitter, facebook, when you're a brand or you're someone trying to begin a following, there's a real demand for this i'm not surprised this happens i think it's not something that influences results maybe it influences the single

person or a couple accounts. >> for all the hand wringing among the advertising community about how long people see the ads, there really is no place else to go isn't that a longer term -- isn't that an existential problem if there's no place else to go? >> perhaps it is, but internet advertising is still a modest fraction over advertising. >> it's becoming a larger and larger part. >> it is that's why we've invested in this area aggressively >> and where do you put snap >> basically they rebuilt their product a year after the ipo that's damning to me i think evan has a great vision for product but delayed investing in the ad stack and it

shows. to put up an ad on snap, you have to be a major brand or someone who can afford to build custom ad solutions. >> is there any up-and-coming flat form where you say these guys got it? >> nothing on the scale of facebook or google these guys invested decades into their ad tech stack, and it shows. the quality of ads on my feed, sometimes i can't tell the difference between advertising and organic content, like in a good way >> as someone buying advertising? >> no, as a user sometimes i forget to buy clothes for months on end, then i see a carrousel of attractive products, i don't get that anywhere else. >> coming up, we get -- there's constant communication

when we go to break, i'll tell you. coming up, from one tech giant to another, the street's reaction to the quarterly report before we go to break, here are yesterday's winners and losers nah. not gonna happen.

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in times square. good morning u.s. equity futures at this hour, when i woke up they were positive did you see early on i shave, and, you know, do all kinds of stuff looking at my iphone now >> you saw fair value? >> i think that's the only problem. they were up, right? up about 60 points i shave, i look at myself. i'm sitting down typically >> you sit down and shave? >> yeah. in the shower, i hope. >> no, you just -- i'm relaxing, waiting to -- never mind what's wrong i'm shaving, looking at my iphone getting up you don't -- andrew -- >> no. >> no. >> okay. fine it's a new day >> it's a new day. >> it's the morning. the yield on the ten-year -- >> tmi >> ten-year is at -- 2.748%.

oil prices sharply higher. >> that's weird with the additional supply we keep seeing from the united states producing things oil prices picking up. >> i read -- this is -- the jou "journal," treasury yields rising because government bonds are hitting the market as the u.s. budget deficit is growing so we added 10 trillion and the yields didn't move >> so they're saying that the reason the prices are going up is because it's a -- >> we're over 20 trillion now. >> but the economy is also booming. >> if there was true horrific crowding out -- >> our central bank is raising rates. if there was true horrific crowding out -- >> there's probably lots of reasons for it >> yes

>> don't know that it deserved a ten-point. january was a big month. andrew's face. january was a big month for the bulls. the dow and the s&p had their best month since may of 2016 the dow gained 5.8%. the zm up 5.6% the nasdaq posted its best month since 2015 gaining more than 7%. 8 of 11 sectors were positive for january. consumer discretionary led the way higher, up more than 9%. utilities down 3%. the dollar is a massive story. the index posting its worst month since march of 2016. john lafont is slipping a little typically we would have had a toilet flush >> thank you for the visual. >> he would have immediately --

>> thank you for the visual i can't unsee in my mind >> it should get the "squawkward" moment is >> this is not awkward, this is life >> this is a little "squawkward. >> i don't think it is don't you have an electric razor? >> i do. >> don't you try to combine things you do -- frfrnlts an >> from an efficiency p perspecti perspective -- >> thank you, john >> the first person do that, archie bunker. >> so it's already been broken, and you're just retreading old, tired news >> how often do you do electric and -- >> i don't think comparing yourself to archie bunk serer i great idea >> meathead. >> i'm gloria. >> or edith. take your pick today is the single busiest day of the earnings season before the opening bell, we will get results from alibaba, conoco

phillips, mastercard, time warner and u.p.s. after the close, alphabet, amazon, apple, amgen, visa and mattel dow dupont beat forecasts as the company raised its estimates for cost savings from the merger it also said it expected to complete a planned split into three public companies somewhere about 14 to 16 months from now the stock is down by 38 cents. couple things on today's agenda weekly jobless claims are out at 8:30 a.m. eastern along with fourth quarter productivity and labor costs. at 10:00, january ism manufacturing index and december construction spending. we will get january auto sales throughout the morning among the buzz stories of the morning, if you were planning on purchasing one of

elon musk's flame throwers, you are out of luck. musk sold out of all 20,000 flame throwers, that's $10 million in flame throwers alone. musk tweeting that out this morning also tweeting that all flame flowers will ship with a boring fire extinguisher i still think this whole thing is so cra-cra, as they say >> the flame thrower >> he will sell you a gun that looks like a blowtorch -- >> all i think of is carrie fisher from "blues brothers. >> i think of "walking dead. why do you need this >> to burn your house down >> really. >> the flame thrower >> i'm usually a fan of a lot of things he does for some reason this almost upsets me. because i know he deeply cares about the safety of his vehicles and spacex >> for you, dude -- you are

squeamish enough about regular guns if we have people walking around times square with flame throwers -- >> in california, a couple of government officials came out and said this is crazy >> you can't do this >> apparently you can sell not a flame thrower, but some kind of fire something, but it can't go more than ten feet his doesn't, so he thinks it's legal. it's a bad idea. kids will buy these. >> deer hunter in times of war, they can be useful the enemy and everything >> but in a peaceful society -- >> i almost thought this was an april fool's joke, because they said they would ship them after april 1st. but it's not a joke. you can go on and put your credit card in maybe you can't because they sold out >> i'm trying to think of one single time when you would need this other than to do what he's doing -- >> chase somebody. >> or just do it

you know what else is good to carry around chainsaws. fun. >> chainsaws, i can think of uses for that. >> just in times square. people will shy away especially -- >> don't wear a hockey mask. >> think about that. >> nobody will disagree with you. it's a bad idea. >> i don't understand it isn't there an adviser who would say this is not a good idea? >> yes, you would think of the legal ramifications that would come back as soon as something bad happens with one of these things, which i would say is almost a certainty >> right okay elon, if you're watching, we will be your advisers at this point. shut the whole thing down. when we return, a new report for cryptocurrency it's fascinating about whether, in fact, some of these cryptocurrencies may be artificially inflated. and later tim armstrong will

hang out with the gang and at 8:15, the big business of football a top nfl executive will be our special guest as we talk super bowl you're watching "squawk box" on cnbc pssst. what? i switched to geico and got more. more savings on car insurance? a-ha. and an award-winning mobile app. that is more. oh, there's more. mobile id cards, emergency roadside service... more technology. i can even add a new driver... ...right from her phone! geico. expect great savings and a whole lot more.

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welcome back to "squawk box. it is time for the executive edge a new report out today on crypto fraud. seema mody joins us from cnbc headquarters with the details. >> it's the lack of transparency which makes cryptocurrencies an attractive target for cyber criminals. that's a take away from this new report from digital shadows which said fraudsters are taking advantage of new cryptocurrencies by creating chair own co their own coins and performing exit scams and manipulating prices in several cases, pump and dump schemes to inflate smaller less well-known cryptocurrencies, using apps to disseminate the news digital shadow says social media is a breeding ground for crypto

scams with spoof sites to trick customers into disclosing credentials. earlier this week facebook announced it is banning cryptocurrency advertisements. and the fcc has been warning the risks of investing in the space. they are set to testify during a u.s. senate hearing next tuesday. the topic is virtual currencies. there are ways to protect yourself analysts at digital shadow say be careful of unsolicited messages touting great returns, and enforce strong password security rules that's always important. back to you. >> thank you for that. january proved to be a bad month for bitcoin. the cryptocurrency suffering a 30% decline in the month alone bitcoin is down 30% from the record high in mid-december. joining us to discuss this cryptocurrency volatility is brian kelly.

good morning >> thanks for having me. i need to ask about this story in the times worries grow that the price of bitcoin is being propped up, artificially propped up. a number of people are looking at an exchange called bit finnex, and this idea that there are somehow people, hackers or the like who are using a currency called tether, which is tethered to the dollar and they're -- but it's not tethered to the dollar, and it's being used legitimately potentially to prop up the price of bitcoin and maybe when bitcoin was at its height in the same way we talk about fake followers on twitter, are we talking about fake something else >> yeah. listen, tether is a big part of this ecosystem the real use case for tether is for global arbitrage so you'll see when bitcoin falls quite a bit, falls 10%, 20% in a

day, you'll see the exchanges, the prices get disconnected. then what will happen is people use tether to buy bitcoin at a lower price and on exchange like bit finnex, and then they bring it over here and sell it in the u.s. that's the mechanics -- >> so you can get it for cheaper in asia. >> in asia you can buy it 2%, 3% cheaper. on big wild days it can be a 10% spread >> how much of the market -- is there a huge arbitrage community now? >> yes >> do they have to be physically based in asia and have a partner in the united states >> most people doing the arbitrage have offices throughout the world so physically based in asia. there's structural frictions korea, very difficult to get money out of the country at times korea traded at a 30% spread to the rest of the world. that's because once you get the money in there, you can't get it

out. if you have a korean partner and banking relationship, you can do that >> what is the intrinsic value of bitcoin now >> the intrinsic value, the way i measure it is number of transactions i do a simple regression with transactions and velocity. intrinsic value in the 8,000s or so we're at 9,500 total >> still a little high >> yeah. >> are you shorting bitcoin? >> no. absolutely not no this is such a young technology, to short it makes no sense in terms of the risk reward this thing can move 20%, 30% in a day. the most i'll make is 100% on the downside, the worst is losing 30% on the day. >> is there any new other currency -- we always talk about bitcoin, but people talk about z-cash, ripple, tether, all these things >> tether is just the u.s.

dollar that's what it is. it doesn't move. it will move within a half percent or so of $1. you want to look at the platform companies. ethereum >> classic >> ethereum, classic, eios, cosmos >> tell us, why would we want to look at cosmos over ethereum >> cosmos has the interblockchain protocol you had an aol e-mail, then you had a yahoo! e-mail, you couldn't send them to each other, that's where we are in the blockchain space cosmos now says i can send my aol to my yahoo! e-mail and connects everything. that's the missing link in this space at this point in time. >> there a limited number of these things >> yes all of these -- who is the federal reserve of cosmos? >> there is that -- see, that's the whole thing. there is no centralized figure >> but there's some kind of centralized something built into the technology, there's a

limited number of these things >> that's what the software does >> but people can "fork" these things >> of course they can. >> that's what i don't understand if you can just create more of any of it, doesn't that drive down the potential value >> not any more than if the venezuela currency is de-valued. >> i wouldn't buy the venezuela currency either. >> don't buy the forked coin >> can we delegate this to him >> are you -- >> i took the book, the bitcoin book to davos. >> and -- >> i opened it i started reading it, turned on "law & order." didn't make it to the end. am i missing out >> yes, you're missing all the fun. this is a verbsocial and econom revolution if you miss facebook, the internet, you'll miss this >> i miss it and i don't i like the internet.

you can buy things >> did you like the internet in '95? >> no. >> so where do you want to be? >> a lot of people are long the blockchain but not long these various currencies themselves. they think the technology unto itself is interesting, but -- >> blockchain without the currency is a fancy database the currency is the new economic model. >> brian, always great to see you. >> thanks. coming up, the big business of booze we'll introduce you to a startup looking to cash in in the next hour, we'll talk media with oath's ceo tim armstrong. you're watching "squawk box" on cnbc stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker.

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how does it work >> it various by city. in new york is free delivery >> that's good because mini bars rip you off. >> we are the better alternative. >> how do you guys make money if you don't charge for delivery. >> we take a small marketing fee from our store partners. >> when do you card people >> on the delivery >> okay, so if it goes back if they are not of age. >> or overly intoxicated >> no way, how do you judge that >> it is at the liquor store's discretion >> how did you guys come up with this >> one night, lyndsey and i knew each other well and one night over take out and you can guess what happened, we ran out of wine and neither of us want tedt go to the store and we can get everything else with a touch of

a button both of us work in ecommerce >> is this 24-hour a day t >> in texas, they don't sell alcohol on sunday so you won't be able to order bud light on our mini bar >> we are not currently available in salt lake city. >> it is a highly regulated industry to that point but the great thing is that we can within the system. we are helping support small businesses and support local g liquor stores. >> what do you do if i needed oj, mixer? >> we do have mixers ss >> we do have mixers

>> what's mote for the business, what's going to prevent jeff bezos says i can do this >> we think building a unique brand that's accustom shopping experience for this category and people don't know what beer to buy or wine, we have a great shopping team dedicated to this and we build the platform for the complicated three tier liquor system. >> you walk in and you are faced of rows of products and you have no information of what you are getting. the great thing of our mini bar delivery, there is information >> will you wrap it as a gift? >> we will >> gift spikes a ton in december >> i think you may solve a lot of my problem.

>> lara and lyndsey, thank you both >> top stories including a flood of corporate earnings. we'll welcome today's guest, michael rubin, he's cashing in on the big business of sports including this weekend's super bowl take a look at what's going on with dow down 21 points and dow and nasdaq you are watching "squawk box."

good morning, wall street is looking to kickoff february in the green, if it can after the dow and s&p 500 posted their best monthly performance in nearly two years taking a break, facebook is

recording a big drop off in one key metric a full wrap up of the company's quarter is straight ahead. retail, social media, super bowl, guest toast and billionaire michael rubin talks with us about football fans and the online experience and the game as the second hour of "squawk box" begins now. >> live from new york city, think "squawk box. >> good morning, welcome back to "squawk box" right here on cnbc, we are live in times square, i am drew sorkin and along with rebecca quick and joe kernen we have michael rubin, a lot to

talk about members only service of books and electronics and toys and so much more. we got a lot to talk to him about regarding the super bowl lets take at futures this hour dow is off at 23 points nasdaq is up marginally has gone into the red for about a moment there. s&p 500 is looking at 3.5 higher a couple of things making headlines right now. we are watching shares of facebook this morning, it beats the consensus estimate of $1.85. facebook did say a lot of people are focusing on users are spending less time on its platform as facebook adjusts what it shows users. retailer alibaba earnings did come in slightly below forecast but revenues did beat consensus. cloud competing revenue more

than double. it also bought a 33% stake in financial. it is a aaa day for earnings after today's closing bell we'll get results from apple, amazon and alphabet. all those hitting this afternoon, a lot to watch there. quickly recapping january. the dow was up 5.8%. s&p 500 was up 5.6% and the nasdaq posted its best month since october 2015, it was up 7.4% consumer discretionary leading the way with more than a 9% gain utilities were the lagger, they were down more than 3% and the dow has its worst month

since 2016 adjusted earnings beating forecast, revenues rose 12%. at&t's fourth quarter, the company was held of tax cut and addition of 300,000 wireless customers. stevenson also is saying he's confident the company will fill the 85 billion time warner a trial is set for march lets talk markets now. here is chart cantor of the cantor group and jim paulsen, i am going to start with you jim, i need charles to listen to this wow, you really are saying things, jim. you are saying things and you

are taking a stand and we like that listen to this charles, the dollar keeps leaking, it goes down to 80 ten-yr breaks about 3. wage inflation reaches 3.5%. the stock market suffers a 15% correction and commodities do both better in stocks than bond this year. paulsen, have i got you right on that did you think the sentiment at this point has gotten too bullish and we are over valued in terms of multiples, is all that what you are really thinking >> well, those are a lot of guesses on the year. >> well, i am not just picking stuff, it maybe interesting. you got to tell your clients what to do and this is your best

case nscenario, right jim? >> that's where i lead and i am sure not all of that will work out that way that's the trend that i see unfolding. >> so you are seeing some of your picks that you brought us from previous years so you realize some of these may not work as we realize >> yes >> no one is right all the time. 51% is pretty good, i think. >> that's right. i agree, joe i just think that challenges are mounting here. the values have been high and they still are and you are losing the element of surprise and the economic and earnings report are fabulous but we know they're fabulous and they're not going to have the same upside impact as they used to have. the wall of worry is gone. it never felt bullish and financial liquidity and a rare

thing in this commodity. yields are going up. the cod ray of challenges is going to probably cause a correction at some point this year who knows if it is 3,000 before it does that or realready into it >> you will be right into inflation some day and even if you are right this year, you are only three or four years early on it. you will be on commodities and stuff and you will be right. the time will come >> you heard a lot of that you are not quite as -- >> i would summiarize that mostl on fundamentals, business confidence is up and economy is great. as earnings go, the interesting thing about inflation ex pec expectations is there is a step up in real growth.

the worry this year is are things too good that inflation expectation creams expectation creeps in. from our viewpoint the market is no more expensive today than a year ago the surge of profits and cash flow it is not a one time thing that just disappears. figure out how much of the cash flow gets reinvested productively and how much gets shared with employees and how much gets invested in the business >> you know charles points out, jacksonvil jim, you know how we always hear about ceos and uncertainty and this and that. the tax of uncertainty is now gone and they can make plans well into the future you got fed on uncertainty but from low levels sometimes it is good in davos,

everyone is positive, wow, everyone is positive that makes us worried there is a lot of good things. you can be wrong in that way, too. >> it would be unusual not to plan for more volatility but the cash flow thing is real. so there is nothing overly demanding where equities are priced today and there is going to be a surge in capital investment because after tax return is going to go higher in the short term >> yeah, paulsen, i don't know, i got a case of the monday o thursday or something. >> you know it is true it is all coming up roses. >> where are you, minneapolis or something? it is cold you got seasonal effect going on >> well, the vikings lost. that could affected me

they're not in the super bowl. >> no, that's true, too. >> joe, i think it is all coming up roses it is a good reminder that this bull market was driven consistently by the lack of it coming up roses. the wall of worry is what kept this thing you have to also consider that the market is up big, too. i think it is pretty highly valued we are trading 12-month earnings and 19 times forward earnings. if you put a treasury yield at 3%, i think that's tie high of evaluations to sustain often when it gets good on main street, it gets more difficult on wall street and if all that spending is coming now because of tax cuts, i don't know what resources we have left to employ and i think the results are going to be a drive up anominal

activity than real growth. >> already, we'll see both of you gentlemen again and we'll revisit this what did you think of that play? you must have been like -- the one that got you, was that the greatest moment of your life >> pretty close. >> and then what happened? >> it only lasted for a week >> cramer was like laughing at you and all your friends anyway -- >> well, i am rooting for the eagles if they win, they can show us there is hope for the vikings some day as well we'll see. >> definitely is >> cricket >> this late ending talk is confusing to me. you are a bowler and batter.

>> joining us now is michael rubin, he's got a lot of things he does, too but we'll talk fanatics first it is a $2 billion player. >> we have credit sales. i would not say they're a big part of a billion but we got them >> we are here, any fans and any sports >> do you know the biggest player >> i have no idea. >> you got to get india. millions of millions of people >> if we don't, we'll get it for you. >> michael, ru tyou are the co-r of the 76ers and defvils >> i am a big patriots fan >> really? >> i have been a patriot fan for a long time. everyone at the company is rooting for r the eagles

i am a big confused but i sit with the patriots. >> why did you say it is a better business outcome. >> the patriots wins the super bowl every year. >> if you want one of these shirts, you got one last year, the year before and the year before >> got it. >> if you are an eagles fan, you never wear the super bowl so you cannot wait to get the mer merchandi merchandise. we have tl best nfl postseason, we are up nearly 30% this year it is the best postseason for us it is a great matchup on top of it >> why do you think that is? is this just online or simply about the games? >> it is a combination of everything online growth is 30% and wholesale growth, we sell merchandise to different retails are up the excitement of the game is in

a big way. we could not be excited in 30% increase of consumer demand. >> where does it play out the most >> overall nfl business, we are up 30% it is our fastest growing sport right now. coming off last season was not the easiest season for the nfl fans came right back hey, this is my team, i am going to sport it. >> how many new products you have to create literally in the past two weeks >> this product right here is the under dog shirt. >> nice. >> and so what happens is for philadelphia, they're under dogs everyone was wearing dog masks to the game. our team looked and said this is a great opportunity. >> did you sell masks? >> we did not sell masks we sold 67,000 of these under

dog t-shirts it is the number one selling items. >> are you producing a tom brady's glove yet? >> number one selling jersey this year, tom brady this guy is a number one selling jersey every year. he's still the number one selling jersey >> that's what happens when you keep on winning. so many people bought his jersey already, we were surprised to see the patriots up in double digits on top of how well they have done for the last -- they had such a great run >> how much money do you have to share in terms of revenues split with the team and the league so if that shirt, how much is this shirt >> it is a $30 t-shirt >> give or take. so there is 15 bucks, how much

of that do you have to share with the team, the nfl and the manufacture, what's the break down >> in the old days, that t-shirt was sold at wholesale and the league's team and anywhere in the world would get 15% of the wholesale, they get about 2 bucks in that shirt. it is different in america and the leagues collect the revenues >> just because they got to super bowl, does not mean they're getting anything extra >> that's basically correct. the team also has a local store but most of the revenues go through the national level 10 years ago it is 1% of their business they're making three times of that $2. it is far more profitable for

the leagues and teams to push their own consumer business and they can best service to fans. it would be hard to get it in retail by the time you call for the idea and you get et oit outo cannot get it to the shelves >> we got to go. we got to talk more though >> minnesota was not -- you remember the new orleans game, maybe we should have known >> of course >> did you know philadelphia is going to do that for minnesota >> i can predict a lot of things but that was not one of them >> the patriots. i watched the buffalo games, these two teams are both bad and next week jackson is great >> tom brady is tom brady >> okay, we got to go. we'll talk more. i don't know who's going to win this game on sunday. cramer tells me it is philadelphia >> i must say the patriots >> we'll be back just a moment

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welcome back, "squawk box," joining us right now is ceo tim

armstrong and musical rub. ♪ michael rubin >> it is great to see you. >> beyond the nfl, what's the next thing >> the next thing is what michael hit on the directive consumers. when you look at what verizon have been investing and doing a good job in it, building great network to get direct to the consumer and the nba deal will be doing more deals like that in the future the second piece is helping people build direct relationships with their favorite teams and leagues when you look attriti ratings rt now, they are down when you think of mobile consumer and where things are going, the level and time of energy spent with the nfl, it is going to increase. verizon is the best mobile

membership in the planet there is a huge benefit for us in the long-term >> that's a huge shake up for all the traditional media guys who used to do this for a long time we saw fox agreed to pay a lot more money on thursday night football is that the right move >> we are great partners with the broadcasters, we rebroadcast. >> ratings are down at the nfl and the broadcasters are saying because nfl is everywhere now including mobile >> the benefit is if you are fox or cnbc or nbc, with our deal, you will get extra lifts if you go to our statistic data, and you look at tv ratings that are down and broadcasters would have made it up in the mobile transition that's happening. wait in retail, mall traffic is down and shopping is down and the reality is no, shopping is up >> retailers are in trouble so

as broadcasters >> we'll make a jump to mobile and if they don't, they'll lose consumers. our business is the most directed consumer mobile business in the planet we know where we are going and doing. it is up to the broadcasters to focus on trying to get there we are in the isolated raan enar them we enable contents to go to consumers. that's our focus right now >> you are trying to break facebook and google. facebook had the number of users going down how do you see it plays out in the advertising side of this >> one thing to recognize and this is a trend for the last 20 years and michael and i have known each other for 20 years.

>> i am only 20 though >> you are a young kid then. when i was at google, the release of panda which is a quality increase and i listened to mark talks at facebook. if engagement are down, that's less important whether consumer experiences are getting better we invested high quality content like the nfl and we can bring it to other areas i think facebook changes for business like ours is in in a high content when i saw the facebook number, i thought maybe the bottom line they're getting quality focus. facebook is more quality focus and what google did. that's a huge benefit of your content. they're going to have more in content and this weekend take the super bowl, with e'll have

of contents and places like facebook and we have a super bowl on monday and maker conference which is the most influential women's conference in the world now look, we like any moves facebook is doing to go to quality. i think it will come around sup super positive >> tim, five years now, the core media contract expires, what's your tradition, is it going to be digital guide, facebook or google or verizon oath, who's going to be five years from now? >> when you mention the craft, we spend a lot of time with them and we do our nfl deals, that's one of the big topics that came up with roger goodell when he was here a month ago with lowell, where is the world going to be in five years? if you look at the trend that's happening today is directive to

consumers of mobile phones built for consumer the text messa the digital platform and movies you have seen it with netflix. i think if five years the digital platform is going to have a real advantage of nfl type deal and the same way of your business type is direct on consumers and verbal commerce and we are betting the verticalness of mobile cutting through your entire life >> are ucoyou convinced that pel are watch ing a full game on this i can see pieces so on my way home i am going to watch some of it >> maybe have an ipad or something. >> i will give you an example. the first weekend we did it. i had a commitment that i had to be at dinner with 12 other guys and we had our phones up, we watched the entire patriots game

during the game, we were texting with some of the folks during the game and they're asking the same question, hey, are you watching the whole game and we had 11 guys who's all watching it >> why didn't you pick a restaurant with a television >> we had epic fail and i would say the undeniable staffs that we saw in the nfl, the first two weeks of the playoffs were not going to go backward and watching full game >> we got to go. this whole fix follower thing that happened over the weekend on twitter, how big of an issue is that and is there other companies we should be watching out? >> all companies, five or six platforms are projected to grow 10% or 20% the only thing that'll slow it down is there is massive area of

fraud or fake accounts you are seeing the entire space or sector moving towards higher quality. i think these are going to be short term bumps on the road overall. i think we are seeing a lot of people kicking up in platform. >> thank you for coming in >> go pats sth when we come back, we automation ceo mike jackson, stick around and the wolf huffed and puffed... like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe.

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good morning, welcome back to "squawk box," we are live, black stone beats at the top and bottom line. 2017 was a quote, "truly exceptional year" for black stone with a record of $1.8 billion in cash flow. earningscoming from cigna

we are now just an hour away from key economic reports. that's at 8:30 at eastern time economists looking for a slight increase in jobs automation rolling out its quarterly results moments ago beating estimates on the top and bottom line. mike jackson, automation, president and ceo, michael was just named chairman of the reserve bank, mike, it is great to see you have you had numbers like this before >> no, joe, they're exceptional and outstanding and the found mitigation fir foundation is driven by revenue of 5.7 billion, of a 4% increase more importantly on the same store sales bases, we increase gross profit by 7%

customers are embracing our one price offering of pre-owned cars and we increase pre-owned profits during the quarter our customer care business continue to grow by 6% all of this led to a result of $1.30. the quarter was also momentus. joe, you know i argued that the american tax system has been the back of the american economy for at least a decade. to see reform and by the way, i think your interview with the president over in davos was one of the best i have seen. you bring out the best in him. but, it means that the u.s. economy is much more competitive. we'll grow faster and it is

benefici beneficial >> we are a u.s. based i love america we move from corporate tax rate of 35% at the federal level down to around 21% which is very meaningful and, put us in a position to significantly increase the benefits of long-term employees. we double our contribution in 401-k and all of which i think was not entirely anticipated that corporate america would do. so, outstanding performance by the operating company. >> i got ten different ways to go from here i remember the initiatives that you were making, mike, lets talk tax reform notwithstanding the initiative you made costs some money and you were the

first to point out that you don't have peak autosales forever and you were worried of some of the incentives that these guys may fall back on. this is a much baeetter quarter than you anticipated and some of your initiatives paid off as well is that fair to say? >> yes joe, that's fair to say. if i look at 2018 now, i think new vehicle sales will go down several percentage point around 16.8 million verses 17 million last year. mike, with all the good news in the economy, how could that be three or four years ago with the manufactures putting all of these incentives into leasing and pushing it to 30% of the marketplace, there is going to be a pay back for that and 2018 is one of these years. we have four million nearly new

vehicles coming back to the mark place. so, if you count the vehicle market as nearly new, it is actually still growing it is away from the new vehicle business consumers are still value. the pre-owned is going to be the counter balancing opportunity in 2018 and 2019 and all that in place >> we had this all the time and they differ on whether they think tax reform is in the mark or not one of t the markets verses a year ago, all the gains we saw, evaluations have not changed because the bottom line. your bottom line, the numbers that you forecast, they were

like, i noticed them how much more goes to the bottom line from tax reform your prime example of that your stock at 60 the same it was at 40 on a multiple basis. >> yes, joe, there is no question that it is not fully put through yet. i think there is been a sense to wait for the earnings season and see what companies say and what the actual numbers are so the analysts can work it through and come to conclusions. if i listen to analysts thus far, there is a feeling that we'll take this more competitive tax situation and lower our prices to compete more aggressively against our competition. i fundamentally disagree with that i don't see that at all, at the store level, tax has never been a calculation in how you compete against each other

90% of our competitive sets are independent entrepreneurs on a pass through tax bases today we have a lower tax bases on a pass through, i don't see it happening joe, you are right this will take some time to prove out in 2018. >> you already -- the people are worried about things getting competed away and there is also sort of depending on what the values are on. a lot of people are calling you double your 401-k, how do you decide how to use these new found bottom line numbers, are corporations doing this sincerely or you wiulterior mots and you expect for it to continue, long-term? >> you can pay out of a one-time benefit to all employees at

500,000 or $200,000 a car and you have all the flexibility in the future of what you do. that was not our approach. we want to reward and retain our longest serving employees and those who are committed to us open ended the way to do that is increase their benefit offering that's a multi year open ended commitment part of the company. we did everything we said of 401-k, our entire benefit package improved we had a bifrocated if you own asset with money, you did very well blue collar did not get the wage increases because the economy was only growing at 2% imagine now in the ninth year of recovery, we have al new win behind our back and we are looking at economic gdp growth of 3% and we'll be significant

benefits for r the workers of america. i think that has not been under stood by the politicians and some analysts of what it means in working america we are going to feel much better about things rather quickly. i have comments from employees already who see how much taxes withheld under their paychecks are changing already that's money right in my pocket. >> andrew is listening >> yesterday, elizabeth warren says the reason she was listening to the state of the union and her whole reason for being a politician was renewed because listening to that and knowing that the punch in the gut that working class americans just gotten from the tax cut makes her more committed than ever to stay and fight

>> there is the disconnect, do you understand that? >> it is utter nonsense, i think that corporate taxes of america was a shackle on the economy >> i got to get my guy in here >> throw something at us >> you buy it. >> you will see. >> i think in the short term, i would actually buy it. >> i think ucoyou convinced himf what i have been unable to do. >> thank you, joe. >> facebook results topping estimates, the company says daily active users declined in the u.s. and canada. they did not spend that much time staring at a computer screen you know what's awesome? gig-speed internet.

you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them. uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party.

welcome back everybody, facebook reported better than expected results on both the bottom and top line. it raises the question of what has been driving the stock to move julia boorstin is in los angeles. how does this all play out >> facebook shares first dip the viral video resulted in

users spending fewer hours on the platform now the stock is up more than 2% premarket after the stock turned positive during the conference call on a number of factors. commentary on an increase and average maintaining the expenditure forecast and sandberg says it should not hit facebook online. people are spending more time viewing posts abecause they are interacting with family and friends and not involved in longer post. >> zuckerberg stressed the important of making the investment resulting of what analysts qualifying of a short time paying for what he sees a long-term gain, especially ramping up communications rather than just viewing the content on

the platform >> i expect this will impact our profit just like the changes we are making will impact time spent. this will help us build a stronger community over the long-term. >> there are opportunities to grow the business across facebook and instagram joe. >> yes, julia, pretty amazing, it is a lot to think about and you never know those are pretty interesting >> thanks for all that julia what would we do without you >> a lot of moving pieces of facebook, i think investors are trying to understand how all these changes that zuckerberg has announced are going to impact the company in the long-term. he's made it clear that he's willing to take higher costs and minimize the engagement number because he thinks he has to fix

facebook fixing facebook is his 2018 goals. it is not a negative that people are spending less time in the platform, does that mean that people are going to be more valuable to facebook if the time they spend on facebook is valuable to them >> i got the same thing fch >> we should have called it a google budget because you spend $100 a year and it goes to google now this facebook that's working for us, it is ten times bigger today than a year ago. we could not make it work years ago. >> it is probably from nothing to 20% over night and we are bullish in this new channel. it is working really well and did not work a few years ago google used to be our biggest spend and today is facebook. i think they are doing the right thing for their users and

long-term health of the business we are shocked and incredibly pleased how fast this is coming. >> julia, thank you, my daily habits of facebook has not changed. >> i heard enough of your daily habits today >> i am watching facebook of the same amount as i have. zero >> coming up merchandise is flying off the shelves. we'll talk about super sales with our guest, michael rubin. you always pay

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welcome back to "squawk box. the eagles are gearing up. fans are breaking records on merchandise sales. we get back with michael rubin, thank you. what are you going to be doing this weekend how much merchandise do you have to create in advance for both potential teams winning and then what do you do when one does not? >> i just saw the numbers yesterday. world manufacture in the month of january more than 3 million units of nfl merchandise that's a lot of units. then what happens is for the directive consumer business, we

make it as we sell it. for retailers they actually buy it and hoping to win the other team that does not win, will get destroyed. mitch model is buying hundreds of thousands of eagle products and he's praying it will win because if not, he'll have to burn those stuff >> so do you have to create t-shirts and say patriots super bowl >> do you have the bengal super bowl >> we have not had those for a long time. >> we had a guy yesterday does sports betting with the betting line is there any calculus in terms of making more merchandise for one team than the other? >> the way it works for us, the directive consumer business is very easy, you build it as you sell it and you do it quickly just in time retail business much more complicated because retail has to bet with the team is going to

win or not mitch modal he'll go out if i am going to sell $20 million eagles stuff, i am going to put $5 million this. >> so if you had to print 100,000 shirts, would they be printing 50,000 for the patriots and the eagles >> we think the patriots may win, we'll do 80,000 on the patriot and 20,000 on the eagles we know what the numbers are the eagles are 40 millions more in revenue because the patriots win every year they have not won a championship since 19 -- >> this is the greatest market of the history of the nfl. eagles are great and their record will never be broken again. >> my question about who's going

to win on sunday, you turned it into money oriented question of how many t-shirt-shirts >> well done >> that's amazing. >> that's a much better way, andrew >> thanks. >> we got patriots >> are you patriots? >> i think so. >> eagles? >> yes >> i would have been patriots but now i got a daughter that's in philadelphia and she's a big eagles fan >> i feel good >> for the pats. >> is gronkowski playing >> brady is amazing. i give him every bit of credit for that but i will take the eagles >> is gronk playing? >> did you see that one game where gronk just took over >> we'll have you in

conversation with jim cramer >> i look forward to that, i know he's a big eagles fan >> when we come back, dow capping its best month since march of 2016. find out if so goes january, so goes the year. we'll talk about that. and the nfl is gearing up for this week's big game, chief media and business officer, ryan rolapp will join us. ryan rolapp will join us ryan rolapp will join us that more accurately assess a business' chances of success. good invent. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital.

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it is the first trading day of the month could it be red hot february we'll talk market strategies straight ahead >> the busiest day of earnings under way. alibaba and ups and black stone. we got the run number os straigt ahead. >> and the business of actual super bowl we'll talk to the chief media and business officer, and the ceo of the 49ers the final of "squawk box" kicks off right now. live from the most powerful city in the world, new york, this is "squawk box.

>> good morning, welcome back t "squawk box" live from times square i am joe kernen and our guest today is chief and executive and fanatics you sold all of that stuff on ebay and you turned that into an unbelieverab unbelievable business. >> ebay bought our business, we bought those business back and it has been 100% focus fanatics was $250 million company. 2010 is about $2 billion business today so we have been, we have doubled the size >> what is this company worth now of the stub, is it worth it as much as what you sold to ebay >> last evaluation was

$4.5 billion >> you are unbelieverabable >> it is amazing >> we'll return to you >> i am upset, i expect you to make fun of me being so much poorer than bezos. last time you gave me such a hard time. since i was with you guys on cyber mono his net worth has increased $22 billion, i have gained 10 pounds he's up $22 billion and i am plus 10 pounds >> he may have lost weight >> i went from horrific. >> lets check out. >> wow >> good day yesterday, bad day on monday and tuesday. here is the futures this morning. we don't know what's going to happen this session, we never do down 10 on the dow s&p 500 is in the black though

treasury yield is backup again we were at 275 or 274 right new. just about 2.75 on the 10-yr we have a special guest coming up in the next half hour, eric trump will join us live in the studio at 8:30 a.m. eastern time we'll talk about the state of the union and tax law and various things of business he's a hotelier as you know. >> a busy monday morning, it is a thursday morning this morning and we are in the midst of ea earnings season. the chemical maker also raise this estimate of cost savings of dowdupont. it will complete the plant in 14 or 16 months and black stone, net income of 71 cents per

share. revenue is also beating forecast black stone is an exceptional year of 2% check out shares of alibaba. earnings came in slightly below forecast but revenue beat consensus, allibaba -- by the way, did you remember the monogram deal did not make it? does it make it complicated for your business if alibaba owns 30% of it. >> when you think amazon is a fast grower, alibaba is a faster grower overtime i got to believe they're going to come to the u.s. and the markets. >> there was a report of kroger sent executives to china and is doing something.

>> i think everybody sends executives to china. i think amazon is figuringing h to be important in many businesses and i think amazon is the same thing we have the headline across the past our or so prince of alibaba is back at work this morning. he was arrested and hotel at the ritz carleton hotel since november there he is at his desk. i was just with him a couple of months >> he's grown a beard and some one sent him a nice bow kuquet f flowers there. >> can he call in? >> held in the ritz is not bad

>> not knowing what happens at the end of it. >> that's fair lets talk about microsoft news this morning. microsoft reported of $6.3 billion lost of the second quarter of a nearly $14 billion tax payments related to products held over seas the company did have strong growth in its plow operation stocks are down 91 cents facebook posting better than expected earnings but users are spending less time on the platform the stock gained $4.41 >> another name a lot of inve investors are watching today is amazon deirdre bosa is joining us now >> the company captured half of all online sales according alexa has become a household name and prime membership is

expected to drive more growth. the street gets ahead of itself when it comes to amazon fourth quarter. amazon missed forecast every q-4 since 2010 while it is taking up bigger shares of the season cea's shop, it is spending on a ton. it is also investing and growing businesses, of course, like digital video and hardware and advertising and brick and mort r mortar margins have been under some pressure so guys, you know amazon is up 25% just this year. this quarter's earnings of the way they had over the last seveh years, we could see them back to earth a little bit >> thank you so much apple is set to report after the

bell we have been watching futures. it is been a lit btle bit this morning. joining us right now is john riding and his managing partner at dougl douglas. yesterday we look at things of 240 points before the markets opened what does it tell you in terms of volatility and what can we expect >> volatility is starting to come back and we had such a good run. right now the mark et that's focused on companies are going to grow. are you going to have organic top line growth?

more investors are moving out towards fixed income, that leads companies that are going to grow organically again and top line growth that's where the market is looking. you will see sector rotation money coming out telecom and utilities and moving into like financials and select tech >> tech and financials are what people are talking about and what makes you think there are still values there >> if you look at the evaluation basis, they are lower than the market with higher growth rates and better balance sheet and if interest rates start moving up, you will get that tail wind and plus in you look at domestic bha banks, they got a tax rate of positive advantage as well

tech we know has secular growth and one other things, when you get to d.c., you will see potential to buy aireas of healthcare and especially biotech. >> when the rhetoric coming from d.c. and talking down on drug prices, do you think that's a buying opportunity >> absolutely. especially companies like se celgene, there is a value for those companies when you look at their multiples and growth rate comparing on what they trade at today. john, lets talk about gdp. the fourth quarter is disappointing, what's the real picture of the economy >> i don't think we are focusing on any long determines

the predicty growth rate is disappointing despite all the technologies that we have seen around us. demographics are difficult for growth and labor force the economy is growing lower at present time hopefully capital spending will change that overtime that sort of thing will change the demand side looks quite strong here is the issue. the economy is growing north of 3% the economy potential to grow is 1.5% to 2% >> lowhat does it mean though >> two things, the trade defici is going to grow considerably from where we are now. secondly, we are at the point where we are seeing inflation pressure that's really difficult for the equity market.

what justifies the broad market is the high level of multiples which comes about of the low levels of bonds. if we put inflation in the mix of 2018, that's the biggest value card for evaluations but, it is not just the u.s. that is growing well now, we got all major economy growing and europe just put its best growth number in the last decade maybe this era where we rely on the internet and technology and ecommerce and keeping inflation, maybe a lot of that in terms of price restraints running its course i would be concern of inflation. >> john ryding and sarat sethi thank you for being us >> we'll talk to brian rolapp

and you do not want to miss this, eric tmpru is going to join us. checking markets right now, back in two in the eastern united stas supported by innovative packaging that extends the shelf life of foods and infrastructure upgrades that help us share our produce with the world. all across new york state, we're building the new new york. to grow your business with us in new york state, visit esd.ny.gov (daniel jacob) for every hour that you're idling in your car, you're sending about half a gallon of gasoline up in the air. that amounts to about 10 pounds of carbon dioxide every week. (malo hutson) growth is good, but when it starts impacting our quality of air

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welcome back to "squawk box" and earnings of mastercard reporting of a 76% drop in quarterly profits. results were hurt by a one time charge of $981 million related to the new tax law excluding items though earnings topped expectations in revenues and also beating the street. >> the count down is on three days for the super bowl. most people are gathered to watch the patriots and eagles. there are more than one avenues to watch the game. joining us now is brian rolapp you got a little deal today.

>> i did the smallest one you ever done >> it was a nice deal. we are happy about it. >> $3 billion with a man named mr. mur dodoch >> unbelievable >> but, overtime as we wanted to build the package, it became a broadcast television package and it is successful over the last few years and we had a lot of interests and fox came with compelling proposals and pitches and we are excited about it. >> roger goodell, the nfl, sometimes you guys are just in the right place and at the right time you wonder back at roger goodell and all the money he makes and god, he's over paid and whether they like how he handled the controversial or not fox got its own stuff going on right now with their sales and all the other stuff. they need to get into sports bigger of the stub of what's

left over so they're willin willing -- that's an unbeliev unbelievable price nbc and cbs must looked at that and what, are you out of your mind >> it had something to do with fox's own individual circumstances which played right into roger goodell and the nfl's hands. >> fox and peter wright says yesterday and he's been consistent is that fox is really built on the nfl back in the early '90s when they build a broadcast network and nfl is the heart of that >> there is an argument that'll be made that is a lost leader for them is that a good position for you to be in for them. >> i think fox needs to speak for themselves of the value deriving from the packet were you surprised by the number >> no, i was not surprised >> no, we got a product --

>> look, if you look at nfl football on television, 37 of the top 50 shows last year were football games and ten years ago, there were only 11 top football shows >> and so when these businesses whether television or digital are in the business of aggregating audiences, there is no better -- >> it is a business. nbc at this point and you know they had to look at that nbc loves football >> when it is not added to half a billion a year they could lose could they almost? >> but, they're pretty smart at fox. i don't think they make investment unless they see a way of returning >> look at your crystal ball, could you have this conversation with roger goodell, historically, when we talk about digital, the google of the worl and facebook of the world, how do you think of them relative to

the big networks and the need to grab eye balls, meaning you want the nfl to be exposed to as many people as possible and that's why historically, it is gone to the big networks a couple years from now, does that change? >> you start to say to yourself there is a tipping point and we can run the super bowl and it kaka c can be exclusive to facebook or netflix. >> i don't know when it will happen you hit on the core business of ours nfl football was built on reach and it is still is reach is more complicated. and as digital grows and they start to aggregate audiences they're looking for really good content so you see them do a lot of sports deal we have done deals with them for other content where with are apart of the thursday package.

so they are in the game, will they actually take a full right package, we'll see i can see it one day >> how does it not to loop the value of what the broadcasters are paying for and when ratings are down and advertisers are going to turn around and say, wait a minute, we are getting less more much more. so the reach actually increases. you had tim on earlier who talked about it. tim talked about a used case of when he actually uses his mobile phone. >> i am having to put it together how it benefits a broadcaster paying more and more every year but seeing it dwindles >> the alternatives are, i thought this was a story that the league was sticking with in other places bus that's why it is down now because people are

taking a mknee >> there is a lot of truth into that there is a fundamental shift of how people consume contents. when we distributed mobilely on these devices. >> he says he makes more money if the eagles win this weekend >> you have to root. when it comes to rating. you are rooting for the best game i imagine could you say it will be interesting for the league >> i cheer for ratings and not for the team >> during the offseason, will you decide neg anything of the kneeling what can you do? >> what we can do is what we have been doing is moving this conversation from protest to

progress >> that's good, protest to progress who came up with that in mackenz, kinsey >> providing these players saying important things. >> do you think we'll see kaepernick, could you see the league embrace him >> we embrace all of our players. whether he's on the field or not, we don't know that's a decision for 32 managers to make >> chief media officer >> i love what you are doing >> that would spark some ratings. >> nice to see you brian >> coming up, elon musk, has a new game you want to make sure you have your fire extinguisher handy >> kids are going to use it, you

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all right folks, welcome back, we are a few seconds away. we have been watching the futures away this morning. dow futures are down 80 points and nasdaq is down by 21 and watching the 10-year rick santelli is standing by, take it away >> we are expecting 235, we end up 230,000 which makes it down 1,000 from a slightly revised 233 last week which now stands at 231 if we look at continuing claim, 1. 1.953 millions now, fauourth quarter, preliminy protectively non pharm down 1/10 of 1%. this is no tt a good number. we are expecting numbers around

three quarters around 1% last quarter now is standing at 2.7. >> productivity is the magic gust dusts. we needed to increase. boy, it is going to need a healthy revision unit, labor cost, well, with productivity lower, they are higher than double of what we expected 2% and last team the last quarter now stands at minus 110 verses minus 210s. that's disappointing news. it comes at a time where bund deals are over 70 bases point. the variety of reasons that everybody is applying them and all of them have some truth whether it is the size of the deficit proportedly needed to be backboned with more issuance that we have been running hot

and rates have been too slow the only debate is how fast and high and when will they test the 3% that we only sell above one day at the end of 13 and other than that, you have to go back towards 2011, becki, back to you. thank you, the point was the bund that was particularly important, too >> if that's picking up, that's something we see ripplining acrs treasury as well steve liesman is here. what do you think? >> the productivity number, it gets a dilemma we are talking about which is what is the speed rate of the economy and what is the speed limit of the economy it is a huge thing if we can raise it by half a foipoint. you do the simple mast of the

core activity of products. right now it looks like a speed limit still about two or 2.5%. can the tax cut and other things raise productivity levels by causing capital investment i want to get to the dilemma of the new chair which is going happen jerome powell, higher rates or lower rates? >> the tax cut stimulus, do you see that's a similtimulus to the economy. we are running below full employment that was in the statement yesterday and high asset values. those are thing that is would lead to more rate hikes. on the other hand, lower rates, do you see the tax cut as a supply side injection to the economy and capital investment of productivity which puts downward pressure on inflation no inflation yet a lot of comments like that. you also have the unremark idea that they are lowingering the

balance she balance sheet. we keep on finding workers put to work and we still have the 25 to 54 class of people have a lower than average of a participation rate maybe they could be brought back in this is what the new fed chair has to deal with it is not immediate. if the debate is about forward hikes, you got to do one, two, and three first so it is something later on this year, we'll have to deal with the marks when i look at what's happening with the 10-yr or 2-yr a special guest that's joining us this morning, eric trump. thank you. >> good to be with you guys as always >> last time we were at our old studio and you were walking by you were walking to another

shop >> i won't mention the network >> joe literally says come on, eric, come on the show >> it was a history channel. >> definitely. so i interviewed the president last week in davos there was a lot of similar things that were in the state of the union, it was more globally focused. for a week now, we have seen and i mentioned to president trump the optimism in davos. >> agreeable >> it was not just synchronized global growth talking about the tax cuts we heard something like that at the state of the union, too. as far as you tweeting this morning about daca, you were at the state of the union, too. >> yeah, i was there, i think he delivered an incredible speech and he's doing an amazing job.

you see jobs are coming back during one of the crown rallies is his crowning achievement if he can get apple in the u.s. and start building plants here and sure enough you guys covered this extensively it is not just the $350 billion they are bringing back to america. it is the $38 million in annual taxes that'll result en. this this is hundreds and hundreds of companies that are coming back here you mentioned optimism on the streets. when i am walking down the street and people coming up to me and said, tell your father i said thank you and my 401-k is at a record high as you know of the wage stagnation of the country more than anybody in last ten years, it is real >> it is polarized though that

you see what's some of the well known leaders of the democrats have said about the tax plan i see a disconnect but they say it in ta straight face. i agree to some extent and some of it you wonder about the motivation of other companies stepping up quickly. >> some of it looks like it maybe incurring favors >> a lot of it looked genuine and sincere. >> we had conversations where a number of ceos explained why they done this >> i had an interesting conversation in davos with an executive, look, we'll start to show big profits >> how do you message that to your employees. >> all of a sudden, we have to decide we might as well do it now rather than wait and chase

it >> so do surprise me of the one number that surprised me was 75% is a big number. i think it was cvs >> i was not sure if i would believer that coming from cvs. >> trump has never gotten 46%. he's got a rock solid -- there is a certain part of the democratic party that's never going to accept him. >> my ran on a businessman he ran on one thing, making this country wealthy again and bringibrin bringing jobs into the country i was keenly focused on the democrats who were sitting there and guys, -- >>s teverything he says he was going to do from economic standpoint that he's done. this country is richer and

$8 trillion richer and it is getting better and better tax cuts have not kicked inuit people are optimistic about that deregulation has been a massive thing for this country i went all across the country trying to campaign every business owner that we talked to are saying that we get choked to death. so many other countries in the world that they did not have this stuff in place to unleash the handcuffs on so many of these businesses and allowing them to be competitive people want to have their business in the u.s. because it is the safest place in the world. >> he offered an inclusive message in davos and i would say a similar at the state of the union and a number of state executives said to me is this a pivot. at some point, he may have to

play with his base likes when he says things that may rile up the establish men establishment. >> is there something going on here he was never elected as the politician he was elected as the new york businessman. if you wanted to have the perfect tone, quite frankly, he would not be elected people are looking at somebody that's sometimes a little direct and not perfectly pc but get results. >> although business leaders of a little bit of absurdity and a certain flow >> you may not like his tone but no one on either sides of the isle can argue about results right now. >> you tell me in eight years if that's maintain true, right? >> three years, right? >> there was generic democrats verses republicans and congress. it was like 17 points and it is

almost zero at this point. we had hoyer yesterday, he may come later during the day, i am just wondering, his comment later was the state of the union tried to paint over a failed presidency when you say it at a straight face and looking at some of the things that happenehappened, i t sure if it rings truth and even of hoyer i think that did not necessary >> that's kind of theater. >> it is the best word for it. >> look at pelosi going out there and james comey, it does not sound like they come up with a new sound bite -- byte to give my father's message, state of the union is a great message

when do we put america first we have to start to put the needs of our people and the needs of our economy, we have to start american companies and american jobs in great organizations. michael, like yours, we need to start to put this first. there is so many things we have done the last decades. >> in davos, he also said america first is not america alone. >> we become an international world and we have become one world. >> we are over in davos tonight for chuck schumer. i think you made him look bad and he got burnt >> did you remember what the president said >> he said i would never humilia humiliate. >> next day or a day after on

remember i read this to you on twitter. daca made such a problem that crying schumer took a beat down. i kind of lielked it but some people thinks he said one thing and the tone goes right back >> that's the front new yorkers that we all know >> at the end of the day, you look at chuck schumer, his rational for not funding the wall was the fact that it is going to cost $20 billion. >> democrats, obama gave iran $150 billion >> their numbers don't compute their numbers don't make sense they are one rational for not building a wall is the exact thing they have not cared about considering our national deficit

under obama doubled. >> it went from $9 trillion to $20 trillion over night. you cannot speak out of both sides of your boumouth. >> we add jeff gregg yesterday, he said chuck schumer is the one that's going to decide whether things are bipartisan this year. >> so, what do you think happens just from what you see and what happens with these two have figured it out together? >> i think you will be surprise how well chuck schumer and my father can work together if he makes that ultimate decision to. you would be surprise of how much could get done if that decision is made there are things that everybody agrees with us, right? >> infrastructure. >> things that'll keep us competitive of the rest of the developing world lets run, lets get it done >> everybody the other night, everybody was clapping when he was talking about insurance

companies. >> the fda process, allowing people to have stage 4 illnesses to die because they cannot get approval or people otherwise don't have any hopes these are things that make our country a better mla is andplac better world lets get this thing done >> a couple of business questions. some items in the news, number one, a lot of people were struck by your father's making comments praising at any time aning at&t warner this deal is up in the air he thought the deal would go up across the finish line the president has said prior to the campaign when he was campaigning that deal should not happen and has made a lot of extra credit critical comments about cnn. do you think the president's

role has changed >> i don't know. i keep it directly separate. i find it interesting. there is a lot of them right i know there is another one and what's happening with amazon and see what happens with bank of america, if you rewind the clock at 6 or 7 a year is big a good thing or big is a bad thing. >> test gdoes it end up becominn impediment down the road in shapes or forms. it is a tough call to make >> we stay on our lane on cnbc and you hear them talk about it. if you were to look at anywhere else today, either the fbi memo that comes out and now more r mueller stuff wants to talk. these are the things that's trending on twitter. do you pay attention to that >> i do. >> i do because i was one of the

first people in the campaign. they use this narrative because they lost and we won we won with 1/7 amount of resource that is we had and we had a better candidate who works harder and a better message. one that america actually embra embraced they create anywhere activinarr would lose them the excuse of them having every advantage. >> i have not seen it. >> will it eventually appear that maybe they had a vested interest of the outcome of the election >> i think it is very clear at this point that they used a memo dossier by the democrats to get a fisa warrant to spy on the campaign there was nothing good about

that >> you see all these other stories with the donations at and andrew mccabe's wife was receiving. >> it is bad stuff >> what fbi does not want a piece? why do you think >> cory booker called a treason. >> it is head of the fbi that was appointed. >> the fbi does not want it out. >> that's the whole question that i have to ask steve wynn >> i know him very well. >> stepping down in rnc in the wake of the report if you are on the board, what do you do now >> he's done incredible things for the industry and what he's built is unparallel and at the same time, accusations are strong, he has to go deal with them i don't want to, you know -- >> dow think it you think it w

business >> the stock price dropped everyday and it drops to 10 bucks when it came out ta it is a scary world and what's happening in regards to that and a lot of this is coming out and it is opening up a problem that's going to stood for a long time i think it is good that it is being spoken across the board. everything has to have their day in court he's done a tremendous amount for hotel industry he's built incredible property and reset a bar. it is going to be interesting to watch >> do you think he should step down from the rnc? >> he did step down. >> i can never interject myself in someone's innovation. he did what he felt was right and clearly we felt it is worth it >> i guess ivanka tomorrow >> if you can talk, maybe next

week >> we'll make it happen for you. >> thank you, thank you for coming in. >> when we come back, business on and off t fldheie, we'll talk to jed work right after the break, the 49ers coach oh, and there's the closing bell. (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪ trade 24/5, only with td ameritrade. and i recently had hi, ia heart attack. it changed my life. but i'm a survivor. after my heart attack, my doctor prescribed brilinta.

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the countdown is on for this sunday's 52nd super bowl, joining us now is san francisco 49ers ceo, jed york. it was like a tale of two cities this year for you, wasn't it

i'm sort of jealous of the qb you have out there i'm sure bill belichick is wondering what happened. >> i'm not sure what he's wondering, he's getting ready for the game but we're certainly happy jim is out here. >> from worst to -- not first but that was pretty impressive and it's been pointed out he's doing okay in san francisco too, moneywise. >> well, it just shows you how important that position is it's the most important position in all of sports and again, it's great to have jimmy out here he's a great guy and there's still a lot of work we need to do. >> michael, how many of those jerseys you sell >> first, we have to say thank you, jimmy actually became the best selling jersey during the holiday season it was absolutely amazing. my question is, you bring jimmy to the 49ers how much of an impact does that have on outlook of the team? what's it mean to business

overall? >> not even the business, i was walking in san francisco yesterday and hear my name from like across the street, don't know who it is, dude literally runs across the street in traffic to say thank you for turning around the team and i mean, that's just an example of how people feel about the 49ers. in terms of business, we have a strong business but the outlook of the team and just the feeling around the team, i think it started with john and kyle coming in. but having a quarterback that you feel can get you to where you want to go, it raises expectations and it's certainly raises the level of enthusiasm around the team. >> talking about being in the valley, i feel like, there's always an edge to being such a great market what's it mean to you from the ability of being such a great san francisco, great market, great technology, what's it mean for kind of the edge on the field and in the business? >> sure, i mean, we're always around cutting edge technology

i'm sitting in stanford studios rights now and company came out of stanford called striver and that was one of the first -- we were one of the first companies -- first teams to work with striver to help with sort of the vr experience of allowing a quarterback to get practice reps and really see what's going on because you know, as a backup quarterback, you don't get a lot of reps, that's one example of being here that we see a first look -- a lot of new technology that can help our team on the field and certainly from a business standpoint it allows you to create a better fan experience and be at the cutting edge of what's coming next in sports. >> jed, we were having a conversation earlier about colin kaepernick and kneeling and what may happen next season do you see a day when he's back on the field >> i think colin needs to figure out what he wants to do. as long as there's a talent gap

at quarterback, someone like colin will be in demand. >> do you think it's tough for an owner to take a risk given the feelings and machinations of this >> i don't think so. we had colin play for us -- i can't remember if it was 11 or 12 games he started and took a knee before that and i think he went 1-10, or 1-11 as our quarterback, a season ago. >> my point, yeah, he knows better than anyone, andrew. >> of course. >> i think it was more about where we were as a team with colin. but colin has a great skillset and i do think he's very misunderstood. i think the message has been really mixed up and lost but in terms of a quarterback, i think he definitely has a chance and it's up to him if he wants to come out and try to play. >> right, jed, thank you we appreciate it we'll be watching next year. could be interesting for all 49ers. >> i appreciate it, guys

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nothey're not investing iney commoditiesies. or fixed income. what people are really putting their money into is what they hope to get out of life. but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more. we want to thank our guest host, michael ruben. as you head to the super bowl tomorrow, one message you think people should be thinking about? >> we're incredibly bullish on that even though there's a change in

denamic, we couldn't be more bullish on the business, we're excited for a great super bowl and great season. >> college football is okay too. >> college basketball. >> college is great and nfl is also twice the size -- >> i look forward to it. big show tomorrow, bob kraft is going to be on. >> awesome make sure you join us tomorrow "squawk on the street" is next ♪ >> good thursday morning futures doentd like the q4 productivity number we got a half hour ago, down a tenth, looking for up a full point and it is the busiest day of earnings season and baba and qualcomm and more on the tape. dax down nearly -- more than 1% and 10-year 2.73 we'll get ism in an hour