more than 1$100 billion wiped of the cryptocurrency market in 24 hours. crypto market. i wouldn't say anything bad about bitcoin. it's friday, february 2, 2018. is that groundhog day? >> it is >> groundhog day ♪ live from new york where business never sleeps, this is "squawk box. this song, you can't not air it welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen andrew ross sorkin is in minneapolis this morning that's the site of super bowl lii. hey, good morning. >> hey there >> he's up >> you made it >> do you guys know how cold it is here? >> how cold? >> any guess >> you had to chisel your dog off of the fire hydrant. >> can you see this?

>> no. what does that say >> minus 7 degrees >> whoa. >> andrew, did the lawyers have their hands in other peoples pockets -- in their own pockets. >> lawyers target joe this time, he said it not me >> you gave me that one. >> it is that cold >> that's making davos look like miami. >> you're not outside. >> no. no we got glass here. can you see? >> beautiful >> makes all the difference. >> we have a big show. we'll tell you about it in a little bit >> you have some cool guests >> we have awesome guests. unbelievable guests. you can't see them, but kenny d. is there >> did kenny step up to the plate with russell and some -- that was him, right? >> russell wilson will be joining us larry fitzgerald will be joining us bob kraft will sit in with us.

kneel ca neel kashkari will talk to us this morning also. >> he's not a football player, right? kashkari >> no. no >> he looks like a football player >> you're right. kind of does >> a little like the rock. we'll check back in with you in a bit. i'm glad that you are in the warm >> it's still cold a little bit >> are you wearing your boots? >> no boots. >> we have recode's ed lee with us this morning. thank you very much for joining us >> good thing you're here, we have a lot of technology earnings to talk about we need andrew's seat filled for that first, before we talk about all of that, let's look at the u.s. equity futures at this hour. things have been under pressure. now the dow is indicated down by 266 points so some continuing

weakness s&p futures down by 21 nasdaq futures down by 45 points it comes after a mixed day for the markets, most of them endin treasury yields. they're rising for a lot of different reasons. part is the better economy though there's some concern about them -- the rate at which they're rising and what that might mean you can see the ten-year note is yielding 2.796%, just below 2.8. the two-year is at 2.166%. we continue to hit four-year highs for the ten-year >> apple is beating the street on the top and bottom lines, stronger than expected iphone prices helped results, but the tech giant offered a weaker than expected revenue guidance for the current quarter. we had some excellent coverage last night watching jim talk about it we had people on the conference call comments were made about average

selling prices, which turned the stock around had been down because of the forecast, in the current quarter it was below but the most profitable quarter for any u.s. company ever. >> the most profitable company period they spend the most on taxes i think the december quarter was better than people were expecting, that means the march quarter will be softer they sold more phones than people were worried they might because of the supply chain rumors and those reports are not always great not always a good indicator. >> is your money on amazon yet for the first trillion dollar company? >> apple is already 900. >> apple 900 amazon is -- >> there's much more upside to amazon >> it's moving quicker, too. >> also amazon has its hands in so many different things it's really just a portfolio company. >> amazon's move between 1,000 and 1500, it's like a time violation. >> you don't want to be shorting

amazon >> that is a throw away comment because i find it humorous we had people say, we said apple, google, or alphabet first -- apple google or amazon. >> amazon said their biggest profit quarter was helped by the tax law. that was an interesting aspect bezos likes to manage a business so no matter how vast the top line grows, he will maintain sort of a thinner profit margin, he wants to push that money back into the company >> it was interesting. i saw an interview where he talked about the quarter they're working on now is one that's a couple years down the road this quarter's numbers are already in the books and have been >> he is already in there. >> there's a push now for amazon to go in the dow to replace ge

>> wow >> ge is down to 120, 130 billion. kind of headed south >> there's the ge mirage >> should have put amazon in but who foknows, nobody knows. >> amazon topping expectations, but the company recorded its biggest profit in history last quarter gaining millions of new prime customers during the holiday season and u.s. tax law changes added to the bottom line >> that's the thing. the tax doubled the profit so there was like, oh, there was even more money than we were managing for now we can do something else with it. thinking they'll be in the dow maybe, thinking of amazon as a portfolio-type company as opposed to a retailer -- >> amazon web services >> which basically pays for

everything else. and despite new competition from google and moftd icrosoft in tht space, they're doing well. >> of course they control the cloud, they're a book seller makes sense to me. don't they sell books? >> yes >> you order books from amazon >> yes >> now it's a web -- >> personally -- i was thinking about it in the shower, they are getting more and more of my personal spending. because it's easy. >> they make it easy >> it's the first place i stop i know it will be here in two days and free shipping >> when it falls off on occasion, you give them a call, they fix it right away >> if i don't find it there, i go somewhere else. alphabet, too. >> i was thinking about bezos. there was brewster's millions, he had to spend $10 million in a month? >> 30 million to win the 300 million in 30 days >> you can't spend it. think about bezos at 120

billion. you just start -- i would want currency that was a million dollar bill. i would go to a restaurant -- >> for tips. >> wouldn't you? isn't 120 billion, is that 1200 million? no >> no. >> it's 120 -- >> 1,000 million is a billion. >> right >> that's -- >> i can't -- it's too big i need scientific notations. >> i will do it now. >> she will do the math now. >> let's talk alphabet what is it >> 120 millions. 1,200 -- >> how many thousand million is it >> a billion is a thousand million. it's 120,000 million >> i knew that >> thank you >> i knew that that's -- that's illustrative of how ridiculous it is

>> he's a millionaire 120,000 times over >> alphabet missing on the -- and he's if his 50s. >> young low 50s. >> geez. alphabet missing on the bottom line, but revenue continued to hold strong thanks to its growing ad business. now we'll get a comment -- i hope you're ready, ed. they're putting it in the prompter now >> i know the stock is down. it's been down since they reported the bottom line was softer than people were looking for. if you're an investor the bottom line on any of these companies is not what you want to look for, you want to make sure the top line is growing. and the cloud service is doing well that's a big part of their potential growth going forward there's another specific metric if people want to get into it on google costs per click that's the ad rates that advertisers are paying that keeps going down. that is a good thing that means there's more ad

inventory, so advertisers are not bidding as high to get it. once those numbers go up, that's a bad sign that means there's less ad inventory, there's more competition. it means that google may be shrinking. i think the lower cpc is a good thing. if you want to dig down to the numbers, that's a way to look at it. >> i don't know if i get that. okay you're the expert on this. i'm listening for now. i'm thinking about it. >> ad advertising is shifting between facebook and going m >> but facebook is chopping down on their ads they are doing it because they think longer term it will be better for the network >> for less distraction, more meaningful interactions. that's an interesting idea when you run a social mnetwork,y you should think about those things, but these indications that zuckerberg gives, what do you really want to get at? you want trustworthy news? what does that mean?

there's a lot of -- >> you don't buy the facebook longer-term strategy >> i don't know what it is that's the problem >> they may not either we'll see. >> in other technology news, sony says its ceo. kazuo hirai will be stepping down in april after six years in the role he will become chairman of the company and sony's cfo will replace him as the ceo that news comes as sony reported better than expected third quarter results helped by the play station and image sensor business we are a couple hours away from our first look at 2018 hiring the january jobs report is out at 8:30 a.m. eastern joining us is john lazetti >> he's over there going, whoa >> these people are dumb >> tv people >> michelle girard from natwest markets. welcome. >> thanks. >> numbers we'll be seeing today

are one thing. but really let's talk about what's happening with the ten-year hop in on this >> obviously we've seen the move up in ten-year yields. i think there's a couple things going on the economy is going well. the market is pricing in more expectations about fed action. the other event is the treasury coming out talking about how much debt they need to borrow to finance this growing deficit tax cuts are only a small part of that story. we have a tremendous amount of golf mvernment spending that wie negotiated and there's more issuance coming >> i did see something that said because the tax cuts, we expected less income coming into the coffers in the beginning because of the tax cuts, as a result it means the debt ceiling will get moved up to the middle of next month. >> the treasury has been focusing on the end of february of the drop-dead date. >> middle of this month.

i forgot it's february >> we may end up, i think, tying that -- if they pass a continuing resolution, we have the government shutdown where we will have to figure that out by february 8th if that gets postponed or they pass something into march. the debt ceiling will have to be raised in order to accommodate this >> the ten-year yield, you think it's -- i know it's a lot of things, higher a good signal or a bad signal >> i think it's higher as a good signal we're talking about rates normalizing and it's a reflection of the fact that economic prospects are improved. there's not that much concern. some growing concern about inflation. i don't think it's being driven because people are now becoming much more worried about an inflation story as much as it is just better economic possibility. the real yield is improving. in the end that's a good thing it can be a good thing for equities as well >> matthew, you agree with that? also, let's talk about what the

atlanta fed sees 5.4% growth in gdp >> completely agree with that. we expect the fed to raise rates four times this year market pricing on the fed has become more reasonable you have seen inflation expectations move up they're not getting out of hand. as with the atlanta fed, it's incredible early in the quarter. the error force these ms for the large. we have solid growth, seeing the consumer is solid, housing, capex picking up >> if the standard dooefratievin from 5.4 is to gdp, it could be 7.4. >> yeah. >> i saw a lot of dour faces yesterday with 5.4 i e-mailed a few people, i'm with you i hope this doesn't happen

people that you know probably from around here even. i said i'm with you. i really hope this doesn't happen 5.4 wouldn't be good for anybody. >> who would want that kind of growth >> am i thinking wrong here? >> yeah. you're confused. >> it would be good. would it be good or bad? >> oh, my goodness >> good or bad why are people so sad! why! >> i think the ten-year yield is at 2. now. >> here's what they worry about -- >> tyou said four rate hikes thi year, if it's 5.4% what does that do? you're ahead of the market the market thinks three. >> if you get faster growth, 5.4%, that's pushing the fed higher it's a number of things. financial conditions are at record levels. even though the fed is tightening, it's not transmitted

to the economy i think for today's data, the wage data will be important. >> larry summers is just staying in davos he's not coming back until we come back down >> we have to make an important point. tax cuts that lead to stronger growth that increase the economy's productivity, increase productivity, that's really important. because that's not inflationary growth i also have four rate hikes. i don't think that's aggressive. it's not because the fed has to stomp on inflation i upped my growth forecast after the tax cuts and didn't feel the need to raise my inflation outlook. that's important to keep in mind >> thank you both for being here >> is that chicago is that a chicago thing? >> cleveland >> your accent >> yeah. >> andrew is in minneapolis. >> it didn't sound like a minneapolis -- >> you do a bit. do you say -- >> buffalo

actually >> actually. i drag my "a's." >> that's very endearing >> reminds him of home >> you wouldn't be one to talk >> salt of the earth >> there we go. >> we like 5% growth in the midwest. >> let's get back to andrew what do you have coming up? >> we have a huge line coming up this weekend's super bowl will compete with huge corporate sponsors and some big celebrities are in town. we'll have the wheels up ceo as our special guest when we come back

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this is your super bowl. big moment for you >> big moment. we have over 100 movements coming in. >> 100 movements means 50 planes in, 50 planes in >> a little more than that because we're still taking flights, booking probably in the 70, 80 range in and out. for wheelsup, that's big numbers. >> you have some big investors who will be on the field or attached to the field. bob kraft, mr. belichick also an investor >> like tom brady i'm working for bill and bob here we are. >> tell me what it takes to orchestrate this you said you're still taking orders people will be calling to get here still >> in our business we have asaps. you call us up, probably take us four to six hours to move a plane from philadelphia or the boston area. so if you're still interested in swinging out here, we got you. >> in terms of -- the celebrity quotient is huge a big party last night with

justin timberlake playing at 1:00 last night at prince's old home >> i would say justin doesn't like to fly commercial either. >> he doesn't like to fly commercial either. is he a wheelsup customer? >> can't say >> confidentiality what about the economy and your business this tax cut, both the tax reform package and what it has meant to depreciation of planes, what does it do to your business >> we used to call it the trump bump, now it's the trump jump. this depreciation for the oems and people who can't afford whole airplane, it's unbelievable for our business. the flight dchtepartments, i.t. spend, it's an unbelievable thing that you can expense the cost of an airplane in one shot. >> i can see why it's good for your business, but i would think all of these companies that historically over the past couple of years have said i'll

get out of this i'll jump on to whee wheelsup and use another service, now do they say i'll buy my own plane >> if they buy their own plane we're supplemental, wheelsup is a supplemental play. the other piece is we can move our financing and we're explo exploring ways to take our financing off balance sheet and sell our fleet theoretically to members. that's an unbelievable play. >> how much pushback do you get when people say these guys don't need to deprecate a plane? >> in terms of the high network individual or the corporate? >> both. >> when you put money into an entrepreneur's pockets and corporations pockets, the theory is that they'll spend more on the economy. i would say if you look at textron or general dynamics, these folks will benefit from people having more money >> another big debate here this place is full of

corporates that's what the super bowl is to a large degree we talked about it earlier this week, the idea that under the new tax regime you can't deduct entertainment the way you used to >> you can, i just think there's more scrutiny as to how much you can deduct i would tell you early returns are super bowl for us is up 65%. >> you don't see this or -- what are the big events art basel, super bowl, masters do you think overtime company also scale back on that stuff? >> i think we're in the experience economy it used to be the luxury goods, piece of art that people aspired to have. today it's about what you're doing. i see corporations are on that front as well. people are wanting to experience things like the super bowl i think ultimately you will not see too much change in behavior. you'll see it the other way. >> you're launching a new plane today. >> yes >> tell us about the plane

we were having a conversation about that larry fink letter i know you're on larry's side on this >> i think we inspired larry we have the red plane coming out today. our third. we had the pink plane for brens breast cancer awareness, the teal plane and now the red plane for heart. >> two questions, on this plane situation, and the larry fink letter, i think you were watching squawk when that letter came out you know who was on our air when he had some not so nice things to say about it. sam zell >> i am in larry fink's corner we need to stand for things. we're citizens of the planet, it's our job to make the planet better the red plane will raise awareness for the number one killer of all time, heart disease. i'm excited and proud of that. i would say on sam zell's front,

sam, you are old school vushgyoe to revisit this thing. appreciate the corporations in the old days, didn't look at 9 world that way, but i think sam is on the wrong side. >> who do you root for this weekend? you have people coming in from philly and boston. >> like nbc, we root for ratings. we root for the individual and teams in the wheelsup vernacular the good news is we have brady, a member ambassador with the kraft/belichick story, and gronk. on the other side the eagles are with us, coach pederson. we're in a no-lose >> you'll tell me during the break who you are really rooting for. kenny, thank you guys, back to you, and when we return, the inside line on apple. shares there whipsawing in after hours trading. steve minochlevi will help us

get to the bottom of that next

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welcome back you're watching "squawk box" live from the nasdaq market site in times square. >> good morning, everybody let's look at the u.s. equity futures. they are not so hot. they've been under a bit of pressure you will see right now the dow futures are down by 220 points that's off the worst sessions of the morning. we've seen them down by 260 points right now s&p futures are down by close to 19 the nasdaq down by 48.

that's all coming as we continue to see yields in the treasury market pick up steen this morning you can look at the ten-year, which was sitting at another four-year high last night. up again this morning, 2.794%. >> apple looking at this story here, we stopped with the -- taking a bite out of and the slice it this way, doesn't fall from -- we stopped doing that. >> at your insistence. >> we got so tired of it at your mockery, and you bring it up. apple beating estimates on the top and bottom line but the second quarter revenue guidance came in below estimates. on tax reform apple's cfo says the new law will allow it to target a more optimal capital structure. the company says capital allocation detail also come out with second quarter earnings joining us is steve milanovich how long have you been doing

this 20 years 30 years >> 30 years, but who's counting. >> you were in kindergarten. >> that's right. >> i want you to make this dramatic take us back to yesterday. when it came out i was watching initially it sold off. the disappointment was that the current quarter guidance in terms of what was disappointing? then what came later on the conference call that turned it around that made people realize this is the greatest quarter that's ever been posted by a u.s. company. >> the quarter itself was strong the issue is the guidance and the fact that the iphone is selling less than people thought it would >> the ten >> the whom thinle thing >> the ten is weaker, it's not a disaster, but the super cycle is dead and apple has become a mature company. at one point the street was looking for 20% unit growth in iphones, then 10%, now low single digit

the good news is the emphases on the installed base, 1.3 million devices. new users coming into the ecosystem from outside the u.s., and cook's comment that i wouldn't get upset with 90-day results. we are in this for the long haul apple can find more ways to monetize users >> i saw somebody describe it as saying they're a services company now. not a gadget company is that true >> not exactly in the sense that you don't get those sf servicef you don't cell phones. but services is still growing in the 20s. it's got a high margin increasingly the growth in the futures will come from services and wearables. these non-iphone products will matter, given that the iphone will grow by the low single digits >> three, four years ago price targets were putting it at a trillion dollar company.

they were seeing this still rapid growth what you just said was that it was turning into a mature company, where all it gets is ten times earnings, right? it's a great company it's not a bad company, but it's not going to grow at 30% a year anymore. is it? >> absolutely not. i think it will be maybe 5%, 10% earnings grower. they do have the lower tax rate. they have the ability to buy back significant shares. >> what multiple would you put on it? >> we're at a 16 p for a target price. >> that will be at a trillion dollars. >> they will keep buying stock and taking shares down, so it makes it harder to get there now you think of this more as an annuity company, it's not a growth company, it's like a nike, a consumer brand that you can count on you will buy shoes when you need them and a new phone when you need it. having cool new futures gets you over the edge. >> what do they do with all that cash now

what do they do with this? what's the best use of that cash >> for thousand probablem now pk the stock. they didn't talk about how much they'll buy back, but they said they will go to a net cash position of zero they claim this doesn't change the m&a strategy we said we don't think they'll acquire netflix, they don't need to be a huge content player. if they get into transportation or health -- >> i hope they don't do that >> services, as we talked about earlier, that's the better margin, better growth business, even though it's a much smaller piece of it. should they invest more in that? they've been doing tv shows. is that the direction they should head in to get that growth >> that's one direction. they won't try to compete with netflix, but there's an opportunity to monetize the base

through more services, whether it's video, or payments, or who knows what it might be in the future >> please sign up for apple music, we'll throw in these other things >> and you can buy a home pod now and play your music. >> you were warned these companies would buy back stock with the repatriated earnings. here you are, you were right how horrible raise it to $1,000 an hour minimum wage >> raise wages, but don't buy back -- >> you are disappointed? >> it's still early. >> you warned about it they would raise dividends for 401(k)s. this is the worst case scenario. >> it's not the worst case there's good things to do. you're better spent on wages and cap capex. >> when i send a text message to someone and it's not blue -- >> what world are we living in what phone are you on?

doesn't everybody has an iphone? >> apple is gaining share against those phones >> they are. >> it comes back green are you living in the '70s >> you have totally -- there's no way out for you >> i'm heading up to the ces show andrew is at the super bowl. i'm at the ces >> i'd watch that. >> you can buy things online what's the last thing you need to tell us about apple anything you have to get off your chest with this >> this quarter is important in terms of basically changing it from the potential growth story to much more of an annuity story. this is the break. the super cycle is dead, long live the installed base growth >> all right thank you. that was dramatic. >> i tried >> you told us a chronology, a story. i will watch it again when i go home thank you. andrew, what's coming up >> okay. when we return, the big business

of football. on and off the field, seattle seahawks quarterback and we should say entrepreneur russell wilson will be our special guest. we'll do that next live from minneapolis. stay tuned, you're watching "squawk box" on cnbc pebowl lii is coming up this weekend. is pushing the new new york forward. we're the number one dairy and apple producers in the eastern united states 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

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welcome back i saw one of your tweets i follow becky >> you don't follow me on twitter. >> no. i don't follow liesman u.s. equity -- i think i'm blocked, in fact i blocked him, i think he blocked me down 233 on the dow. a lot of wire services yesterday said there was a lot of churning in the stock market and stocks fall the dow was up 37, but the s&p was down 1.6 >> at one point -- >> it was mixed. >> the ten-year, let's see if we

got that 2.8 2 2.79 >> creeping closer to 2.8. >> we'll have more of these sell side types on today. they have forecasts where they think the ten-year will go most between 3 and 3.25. >> the two economists earlier both said they expect four rate hikes this year, instead of the three. >> wow, a booming economy, right? >> that's what it means. >> exactly >> a lot of things it's the german bund is up 70 basis points >> well, rate hikes, but also where the dollar is now, that's a big question mark, how that's -- why is that -- >> we have someone coming on who thinks that once we get -- once we stop raising, the dollar will strengthen again, which is counter intuitive. >> europe is probably growing

faster than u.s. in this way >> growing faster than expected. that's for sure. >> we buy from them. >> right now it's time for the executive edge let's get back out to andrew at super bowl lii in minneapolis. andrew >> thank you, becky. i'm here at the home of sunday's big game the first thing i did when i arrived yesterday was to head to the nfl experience center to hang out with luke kuechly of the carolina panthers. look what we did >> teach me what are we going to do >> the most important thing at the combine. the 40 yard dash for a speed guy like you foot forward here. spin there. come straight down you have to keep that foot there. >> hold on >> come here with the hand there. there's going to be a line here that we can't cross. you want to crowd that line as much as you can. >> okay. >> your first movement is a big

step >> okay. >> big step. now you want to stay low and pow their next foot forward. those first two steps are the most important thing >> the whole thing >> are we going for it >> on three. one, two -- >> now as a linebacker you have to tackle. if you're the ball carrier, you want to be able to hit and wrap your arms and grab on to something. >> i got the ball. >> so you can't to come in you want to hit, grab, run your feet an hope your friends show up >> okay. >> as a ball carrier, you want to hold that ball so i don't punch it out >> i want to be like this? >> hold it or else it's coming out. >> okay. >> there you go. it's in. there it's not coming out. it's in there. here we go >> let's talk about the fake out. >> so a juke so angles.

angles of the football is what will prevent that. my angle needs to be to there hip there. >> you're going right at my hip. >> yeah. >> i can do that how many times have you been dunked with the gatorade >> i dunked coach rivera >> favorite super bowl commercial ever? >> michael jordan one. >> thank you >> no problem. >> thank you okay so, yeah, that was embarrassing for me but we thank him luke is awesome. our next guest scores touchdowns on the field and with investors. this morning joining us now is trace me app founder russell wilson thanks for being here. >> thanks for having me. first of all, i'm used to luke tackling me. does he go right for your hip? >> that's his trick, i guess >> becky and joe, i have a coat

on, because it's kind of freezing here. this is like jam ply di jamie dn arriving in a t-shirt. >> it's cold outside. >> it's cold outside, but you play in this when you come to the super bowl, can you root for somebody? you have been on the opposite side of mr. brady and win one. >> i remember my rookie year i came to the super bowl and watched. i learned. the second year we were able to go to the super bowl i used all of that observational work and used it to win the super bowl that was key >> still the same question who are you rooting for? >> you know, i'm not sure if i'm rooting for anybody. i would love to see tom win another one, because he's so special. we're watching greatness >> we keep hearing, for the purpose of business, the business of football, that there's more money to be made if the eagles win not just in the betting line, but because nobody owns the jerseys. it would change the dynamic of

football >> it would. i think the eagles are a good football team. we played them this year they're loaded on the defensive side a lot of guys on offense, too. good game for sure >> you're an entrepreneur now. you have some amazing investors involved in this including jeff bezos. how did that happen? >> the process has been amazing. we have jeff bezos, kenny districter, on kenny dichter, the idea is to bring fans closer to people they love and things they love if you love unc basketball or wisconsin football, that's the place to be. >> tell us, do you call up jeff and you say i need you to take a meeting with me? >> pretty much yeah basically make some connections, find a way so it's a lot of hustle and work it's been a blessing

we're super excited. the idea is to bring people closer to what they love >> your owner is another tech mogul in paul allen. conflict of interest for him to invest can you go to the owner and say i need you -- >> out of respect, yes you go there first then you pass on >> how did that go >> he loved the idea he hopefully wants to -- >> coming in for second rounds >> who knows >> for those uninitiated, explain what trace me is >> think back to the '80s. used to be pearl jam and fan clubs, people would love these bands and everything else. i've been thinking about social media in general what we could do with social media. the idea of let's bring the fan clubs back how do we bring the fan clubs back for the people you love, whether it's sports, athletes like myself, certain teams what if it's musicians, actors, actresses.

so the idea is to have a chance, the fans can see something they've never seen before. take them behind the scenes. a place they have never been >> different than what you're doing on twitter, snap and facebook >> a more in-depth look. i believe that 30% of celebrities fans really do care. wake up to know what i'm doing, what other people are doing. the next 30% are the people who are more momentary fans. every once in a while type of fans the last 40% are people who care occasionally, but not really at all. >> how much mind share on a given day do you spend on social media? >> a lot of it is important to the sponsors for sure. a lot of it is constantly checking back in with your fans, friends. you know, i want to give something to them that they've never seen before. so it's been a special thing so far. i launched early in september, just as more beta and checking

out to see what's working well now that we're ramping up to do something bigger >> how can you feel about what you can say and can't say? this was a complicated season because of some big social issues overhanging things. you in the locker room how do you think about sort of the positions you can take either on social media or just more broadly plus what you do on the field? >> well, i think the great thing about traceme is this idea of we can control the voice and also spread it out to the things that we want to say and truly say and how we want to express our own selves i think a lot of it, spoke in the locker room, andrew, there's a lot of friendship and everything else. there's no perfect answer. the best answer is love, giving back, helping people trying to find new ways to do that that's what i'm dedicated to. >> do you follow all this stuff in the stock market? >> yeah, i do. >> is there anything you like right now? >> not really right now. i'm going to try to stay away --

>> are you a bitcoin man >> big wheels up. >> bitcoin >> i have stayed away from bitcoin. >> outside of traceme social media, who is a winner >> i'm a traceme man >> russell, thank you. >> absolutely. >> thank you guys, when we come back, a lot more to tell you about quarterly results from merck that's all straight ahead. when this bell rings... ...it starts a chain reaction... ...that's heard throughout the connected business world. at&t network security helps protect business, from the largest financial markets to the smallest transactions, by sensing cyber-attacks in near real time and automatically deploying countermeasures. keeping the world of business connected and protected. that's the power of and.

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earnings just out from merck. the first of three dow components that are going to report they beat estimates with quarterly profits at 98 cents a share. the drug maker gave a full year outlook that falls lovely above analyst estimates. dow components exxon mobil and chevron will report. all right. we want to thank ed lee for spending the hour with us. it's been great having you with us. >> it was fun. >> if you had one thing you were watching, what's that? >> i think amazon is the real breakout in this i think just, again, thinking about them as a big portfolio company, sort of a berkshire hathaway type. i think that should give us an idea of, well, it's not just

about retail, they're into studios now, making things, media. that's the thing i think that you should look for next. >> i saw some personal growth in you today. >> yeah. >> i appreciate it i think having -- >> you know why? it's what i'm all about right now. >> personal grab >> no, unifying. unifying everybody state of the union. >> i'm all for that. i think this is happening here. >> it is there was some growth from both of us. >> thanks to becky, right. otherwise i don't know what would happen. >> exactly. >> great having you. folks, when we come back, we will have more of this morning's top stories including the countdown to the jobs report we've been watching the futures this morning, and they have been under quite a bit of pressure. dow futures down by 230 points s&p futures off by 21. nasdaq off by 65 stay tuned, you are watching "squawk box" right here on cnbc.

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good morning pressure on u.s. stocks. the futures pointing to a sharply lower open on this jobs friday remember monday and tuesday, big losses, too. is this the beginning or are we already in a correction? we will have a lot of analysis. aaa earnings, amazon, apple and google oh, alphabet, that's why it's aaa. investors reacting and jeff bezos fortune just jumped more than $6 billion overnight. big market big data big earnings and the big game. it's "squawk" super bowl on this friday, february 2nd ground hog day, 2018 "squawk box" beginnings right now. live from new york where business never sleeps, this is

"squawk box." good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick, along with joe kernen andrew has made his way to the super bowl he is in minneapolis taking a look at the business of the big game andrew is going to be talking to nung patriots owner robert kraft. andrew, staying warm sort offish >> sort offish sort offish. we're still below 7 here. >> you saw russell wilson in a t-shirt. >> right >> i can't compete. >> exactly can you see your breath? >> not -- can we see our breath? a little bit not really i don't know if you can see it anyway, we'll have bob kraft out here in just a little bit, talk about the big game, super bowl lii of course going to be on nbc this sunday, this weekend. by the way, i didn't know this historically -- they've won, but

when they've won, only by 6 points the betting line now is 4 points so think about that one. >> okay. we're going to check in with andrew in just a few minutes in the meantime, take a look at the u.s. equity futures been under pressure with dow futures down by 224 points that is off the worst levels of the morning. we've seen down by 265 points this morning s&p futures down by 20 the nasdaq down by 60 points a lot of this has to do with what we've seen in terms of the treasury market. yields there on the move as well the ten year pushing up towards 2.8% the latest check on that move is 2.792% also, cryptocurrencies are picking up where they left off in january falling hard once again this morning bitcoin dipping below the 8,000 mark that's the first time that's happened since november 24th. >> down 10% yesterday. >> yeah. there are a lot of concerns when you have facebook saying you're not allowed to put

cryptocurrency ads on it when you see korea making moves, regulating a lot of this, not allowing it. that's what's put so much pressure, at least in the past week or so >> best just to avoid any commentary, i think, about that, from bitcoin. >> afraid of the haters that you get? >> i haven't gotten those. i don't really understand it that well so i don't know. people have said things. it's just like the eye iomegas. >> jimmy diamond. >> the old tazerians. >> yes. >> it's the true believers the true believers. >> they get so mad. >> very mad -- >> if you're called a denier, you know the person calling you that has some issues apple beating the street on the top and bottom lines stronger than expected iphone prices helped that result the tech giant offered weaker than expected revenue for the quarter. apple also said iphone units

fell from a year ago but what a quarter. cnbc's josh lip ton asked apple ceo tim cook if the new iphone x is still a mainstream product with the steep product cook said in his words, you don't become the top selling smartphone in the world by being a niche product. we would like it to be for everyone, and watching last night when the stock -- it was not down it was down a dollar at one point and then it suddenly turned around and was up 3 or $4 it didn't hold those gains, i don't think. it was after average selling prices based on the x being $1,000 average selling price it was discussed on a conference call helped the stock go back out you can see it's up half a percent. also, amazon topping expectations as well amazon recording its biggest profit in history last quarter amazon gaining millions of new prime customers during the holiday shipping season.

u.s. tax law savings adding to the tech giant's bottom line check this out, up 5.7% now. gain of $80 for amazon's shares. jeff bezos has seen his fortune jump by more than $6 billion overnight to a record $123 billion. we'll be speaking with an amazon analyst coming up at 7:30 a.m. eastern time rounding out the aaa earnings report last night, alphabet missing on the bottom line revenue holding strop topping $32 billion. alphabet also announced that john hennessey will be the new chairman of the board. he's been a board member since 2004 he takes that job from eric schmidt who announced he was stepping down in december. alphabet shares down by $50. decline of 4.25%. we're less than 90 minutes away from the number of the month, at least what we're calling the number of the month today. the jobs report for january. steve liesman joins us it could be the numbers that

come later this month. >> this is our super bowl. our monthly super bowl. >> the 2nd be. it's too early too front end loaded if you have the best number in february. >> and then it's all downhill from there we'll make other numbers exciting, joe. that's what we do for a living. >> how many other -- how many days this month for february >> 28, i think, right? >> is that it? >> how many other -- >> i've got to check my data screen. >> how many other months have 28 days >> they all do, joe. if you think i was running into that one even at 7:00 in the morning. >> done it before. >> we are looking, joe, very strong jobs report with at least something ofa bounce back from the soft report we had in december here are the numbers for 177 is the average of the consensus survey there 148 was the number, a bit of a disappointment last month not too shabby unemployment estimate not coming down 4.1% still had that for several months in a row. average hourly wages seem to be still modest by up 0.2 adp strong january, strong

december, overstated december. we'll see if it's right this time around. several leading job indicators adp. warmer than average weather during the reference week. that could have helped the big caveat, january job numbers massively done there are fewer temporary holiday workers to be let go in january and february which should support a stronger seasonally adjusted retail payroll number so that's really the story i don't think there's any reason to think whatever this number comes in because of the noise we still have a strong jobs market and i think because of tax cuts and other reasons could get quite a bit stronger the only limit as far as i can tell is the number of available workers and how many people we're going to be able to find to hire. >> somebody -- maybe it was mark zandi, they said they expect unemployment to fall to 3%, 3.5. >> there is some talk. members of the fed called it mid 3s joe, i have to call you out. i've been waiting for you to use your comment that you've used.

strong hands. >> the dome? >> no, strong hands. isn't this a moment when that strong hands concept, a big change in the interest rate verne zblmt you mean where the stocks move from weak hands to strong hands >> weak hands to strong hands. now you have to find strong hands in the current interest rate environment, right? you have a different regime when it comes to rates right now. you have to find people that are willing to hold those stocks at that level of interest rates you have the transition period. >> what's interesting, steve, as long as i've been watching things, it's been a while, bottoms were always easier to find i've never been able to figure out the top. >> top. >> never so i don't know whether the strong hands are unloading into the weak hands right now or -- it doesn't really look like it since we still have buying. >> and you still have it at pretty lofty levels. >> i'm not sure whether the bag holders are set up or whether we keep going and you're wrong by being negative too long. i want to change the subject. >> okay. >> to you. >> me?

>> as an expert on the crazy first quarter -- >> right >> -- effects. i mean, the fed has learned about the first quarter from you, i think. >> well, the fed cited me. >> that's what i mean. >> fiscal fed cited my work. >> usually if you say your work, i laugh. >> you do laugh. >> a lot of times you really have -- >> except it changed the way the government calculates gdp. you can laugh all you want. >> they haven't donnie work on the numbers. >> that work was really -- >> it was influential. >> is it different this first quarter? are the same things that have put a damper on the first quarter, are the factors still -- >> bea -- >> how can the atlanta fed be at five four if -- >> the bea to its credit accepted the work that was done on this and have changed the way they calculate first quarter gdp. have they fixed it all we won't know and we won't know for several years. they've identified some of the weaknesses

another thing going for the first quarter. we ended the quarter on a really strong note. the data in december was strong. that means we don't have to do very much to get a good number in the first quarter what's wrong with the atlanta fed number as i said in a series of e-mails that you mocked me for yesterday in our back and forth -- >> yes. >> was -- right. was that atlanta fed has used this weird ism manufacturing number to boost its consumption and it's led to a series of errors on the part of the atlanta fed, but as was remarked this morning, if they're off by 200 basis points either way, it's still a strong number i still believe we can do 3%. >> someone's producing you know how they produce. we're really just on the end of a string they do all the -- they do all the thinking and the work. thanks, steve. for now we're joined by david bianco at deutsch asset management, james sweeney at credit suisse.

dave, since we're short on time, right now you're saying s&p -- you were stuck at 26.50 for way too long we got to 28.50. you raised the deutsch >> yes. >> you're 100 points off you're sayingthe s&p could hit 3,000 before there's a bear market >> yeah. >> so you see 6% up side total before we get 20% down side? >> no, we don't expect 20% down side. >> you said before we get -- and then the bear market comes. >> no, no, no, we never said the bear market comes. >> we go to 3,000 before the bear market? >> yes we believe that there's a firm grip on this bull market we think this -- >> 3,000 is your -- >> no, no, no, we never said 3,000. we never said 3,000 is the ceiling. we said we expect to exceed 3,000 before suffering -- >> that's not -- >> aha. >> then it could go to 31. >> but, look, i think the key here -- >> and at any time we could get a 3 to 7% correction this year

>> at any time we're in a micro dip which is a 3% pull back if the markets pull back as futures indicate today no big deal. we're watching the bond market. >> could we go to bond market before there's a 20% bear market >> these are all hypotheticals we expect this to be a long lasting expansion where earnings growth continues at a 5% pace beyond 2019. so we're firmly constructive on equities, not just in the united states but especially worldwide. we like foreign stocks, emerging market stocks. i think you should be reacting to the very small dip we're seeing in china shares, emerging asian shares all eyes are on the treasury market our view is the selloff in treasury bonds is going to begin to stop and that ten year yield stabilizes with high 2s. >> pisani on the news call said this is a flowout -- >> yes. >> double digits in every sector. >> yes. >> and the guidance for 2018 is terrific >> inclusive of a tax cut and

even before the benefits of a tax cut. 150, $155. this is 15 to 18% earnings growth the s&p is fairly well protected against the risks of any modest climb. >> i would say a lot of eyes are on the treasury. i mean, if you go out in the street right now, i guarantee you not all eyes. >> you know what this is >> a lot of eyes. >> investors eyes. >> a lot of investors eyes. >> not the currency. >> >> i guarantee you 5%. >> you know where some eyes are? >> it's almost time for the ground hog. >> it is almost time for the ground hog. >> it is >> we're going to punxsutawney we're getting to punxsutawney james first. that's never been your name. >> never. >> you heard steve talking about gdp, talking about the jobs numbers. is this similar to what your work has shown you you actually do the work >> a little bit sometimes, but i think with the labor markets

being the main thing, if you look at labor, income, global money coming in from wages, it's been on a 4.5% trend that hasn't accelerated. a lot of other things have accelerated. consumer savings is doing well people are saving a little bit less sometimes later jobs growth as wages rise that's basically what we're looking for. we're a little bit below consensus on the jobs number but looking for wages higher overall labor income is still good and that's not really the -- >> do you have a gdp forecast for the year >> yeah. it's 2.5 it's in the middle >> in the middle >> well, it's basically a consensus number i'll tell you what we focus on -- >> many people on the street at 2 as there are at 3? >> no. no. >> you're not low at 2.5 that's an average? >> before you change it do you have to actually see it happen or -- >> no. no no but gdp -- gdp gets revised. >> i know but, when it's all -- >> the momentum within the year

is what matters, so actually i would say the key thing right now is that i think the recent manufacturing momentum has already over shot and is about to roll over and there's things like the hurricane effect, which are still in the data which are going to start falling out and i think that's a lot more important than kind of guessing a kind of 12-month gdp number. >> but with you and all your colleagues and other people in the business, 2.5% is in the middle. >> i think that's about where consensus is. >> all right >> part of it is a trade deficit. >> investments are better. >> what's your number, joe >> i am just -- i have hope. i don't have actual numbers. i'm hoping for over 3. >> i think you're going to get a lot of stimulus from the tax cut and i think -- >> you're slowly switching to 3%, which is not permanent. >> not sustained not when you see the productivity numbers we've had

yesterday. we have to have the upward shift in productivity. >> becky and i are talking about let's go from 15 to 20 want to do 20? >> what? >> we could add 32% productivity in our own just between the -- >> you and i. >> at no additional pay. >> i already have enough >> you have to get to breaks on time, joe. you have to read a little more quickly. >> you have no idea. >> you'd be more efficient and you'd make the people in the back year -- >> so much preparation for this show thank you, david bianyo, thank you -- >> you're welcome. thank you, steve. >> oh, yeah. >> we'll see you back in a little bit. >> let's find out what andrew has coming up ahead of the big game andrew you know, it's supposed to be cold in minnesota. this is not like a revelation. >> it is who knew it would be cold indoors? we are indoors, joe. sunday's main event, the super bowl, not just the super bowl of football but the super bowl of marketing for some of the biggest brands on the planet

we'll talk to the head of one of the world's largest sports agencies about the power of the big game you don't want to miss this. in the next half hour, patriots owner robert kraft is going to be our very special guest as his team goes for a sixth trophy more "squawk" in just a moment

welcome back to "squawk box", everybody. we've been watching the futures this morning and so far we have a lot of red arrows. dow futures down by 215 points those are well off the lows of the session. we've seen it more than 265. the s&p is down by just under 18 points and the nasdaq off by 46 points let's get to andrew. he's in minneapolis this morning talking super bowl, business, all of those combinations. andrew, good morning again. >> hey, becky. thanks very much commercials during the 2008 super bowl will average more than $5 million for a 30 second spot some companies are expanding that to include stands and stalls near the stadium. so much more joining us is chris weill who is

momentum's ceo staying up late at another event around here. >> it's hard to go to bed around super bowl. >> you were doing an american express event last night justin timberlake at prince's house? >> yes prince's band came on afterwards a little after midnight. >> by the way, was that surreal? >> unbelievable. >> when you think about all of the different events that are tied into this, there's the ads on tv but there's so much else that you're doing here. >> yeah, the ads on tv are just the part the people at home see. we've been on the ground for a couple of weeks already here with clients like verizon, super bowl live and everything that's happening there. super bowl's just -- the ads are a moment in time. >> when you think about the budget, people say $5 million for 30 seconds, what's the total super bowl connected budget for a lot of these big advertisers >> well, it depends. if you're an official sponsor, it's one thing $5 million is an inexpensive way

to get involved with the nfl if you think about it if you're a league sponsor you're spending 20, $30 million. now with the super bowl as a platform at $5 million, you can create all kinds of activation leading up to it. >> preview what is going to be the hottest thing that everyone -- when we're on the air monday morning, what are we going to be talking about beyond the game? >> we're going to be talking about the ads. that's why it's gone up every year since 1967. >> which ones are we going to talk about >> i think some on the pre-release, i think the amazon -- >> with jeff bezos starring? >> is going to be fabulous i've seen it. >> is there a second piece to that ad? for those of you who are uninitiated and don't know about this ad, it sounds like alexa lost her voice >> celebrities are trying to -- >> we haven't seen the second part of what else is coming. >> i think the auto category is going to be interesting. toyota is going to do a lot. we don't know if chrysler is in. they've been known to come in and do the imported from detroit

ad, halftime in america. >> is there any big social ads that you think are going to be -- meaning social issue ads that are going to generate a conversation >> i don't think so. super bowl is not the place to do that. this is an entertainment -- >> what about budweiser, we hear no horses? >> i heard a rumor they may be in on a ten second spot. the clydesdales may be back and make a cameo. >> last question we talk about social media all the time, facebook, snap, twitter, is there anybody that we're not thinking about, meaning everyone says facebook is the winner. are you seeing any of these other platforms work >> well, i think -- you can't look at any single platform, you have to look at all of them together i think twitter is a big one during the super bowl. facebook youtube is huge during facebook because everyone is going back and watching game highlights and the advertising and everything that comes out. >> when you think of all the people who are here live, that's where you're focused >> yeah. >> how much money is being spent on the ground?

to me that's a -- it's fascinating just walking around here you say, there's money going on. >> there's a lot of it you know, verizon live last night we had 5,000 people outside for a concert at super bowl live with erizon. it was amazing by the way, one of the bands played with their shirts off last night. >> how cold? >> it was freezing 10 below >> 10 below. chris, great to see you. >> good to see you. coming up, we have so much more live from minneapolis this morning. patriots owner bob kraft is stn tito join us at 7:40 a.m. eaerme so much to talk to him about "squawk" is back in two. most etfs only track a benchmark. flexshares etfs are built around the way investors think. with objectives like building capital for the future, managing portfolio risk and liquidity and generating income. that's real etf innovation. flexshares. built by investors, for investors. before investing consider the fund's investment objectives, risks, charges and expenses.

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disease, number one killer of women. that's why we're wearing red today. futures are also wearing red this morning they are pointed sharply lower on this opening. dow futures down by 224 points s&p futures off by 18. nasdaq down by 46. been sitting around these levels all morning although we did see the dow down as much as 266 points earlier this is all coming as we watch treasuries as well the dow, by the way, on pace for the worst week in five months. the dow is on pace for its worst week in three months we're wearing shares of dow component merck. beating forecasts by 98 cents a share. it falls largely above what analysts had been expecting. right now the stock is up by about 23 cents there is an executive suite change in store for japan's sony corporation 2. kazuo hirai, the ceo, will be stepping down.

he will be replaced by the finance chief. sony stock is up by 7% this morning. >> here. do you want -- >> no. >> i'm doing this totally gra two i to uw uws -- i have no ved interest here, but this is -- >> they're hot >> you need these for the super bowl >> is it cold in minneapolis >> they're unbelievable. you don't like hot >> michael, go ahead. >> they're good though i like them. >> mouth on fire. >> i have no reason to do this other than i can. >> other than you're eating them at 7:30 this morning. >> for you. >> no thank you. i love -- the worst doritos. anything that ends in tos. doritos, cheetos, fritos, cheesetos. >> yeah. >> i don't know. >> julia, she puts up with a

lot. cnbc and viacom taking steps towards a possible -- nice red nice women's heart red, julia. julia joins us with more >> thanks, joe what we're talking about now is a potential recombination of cbs and viacom all i can say is here we go. this is a potential recombination for the two media giants by sherry and sumner redstone sherry redstone and her national amusements, owns viacom and cbs called on the two companies to explore a merger by december of that year they had called off that plan national amusement saying it was confident that the under valued assets of viacom could be unleashed under a new management team landed by the new ceo at the time bob backish they have lost 5%. viacom shares are down 12% many have wondered if a merged company would better compete in a quickly consolidating landscape.

with disney's acquisition of fox just the latest and if less nunez could benefit viacom 18%. cbs defying expectations now national amusements wants to see if the time is right saying it, quote, supports the processes announced by cbs and viacom to evaluate a combination of the two companies which we believe has the potential for significant long term value. they have said repeatedly that a deal would have to benefit cbs shareholders we will have to see what kind of terms they discuss and whether or not they can find something that works out becky, back to you. >> that would be the tricky

part, julia. trying to figure out why this would be good for cbs shareholders. >> that's a real challenge we have to remember these are two companies that are both controlled by the redstone national amusements so they can really push them into it it did not make sense two years ago we'll see now with so much more consolidation since then, so much more confidence in the dij flailers. >> maybe more content is the answer i remember thinking when they split the two stocks off it was viacom that was supposed to be the high flyer cbs was supposed to get saddled with the slow growth, mature businesses that didn't work out the way we expected either. >> absolutely. challenge, two different companies. >> they can't claw back the investment banking fees for the geniuses that decided to split them can they claw back >> i don't know. it's been over a dozen years or over a decade so it's been a while. >> these two companies can't be together. >> in 2006, it was 2006. >> they can't be -- which are we now? >> 12 years it's been?

>> is it really? >> that's amazing, les is laughing all the way to the bank. >> julia, thank you very much. folks, let's talk about amazon reporting a beat on both the top and the bottom lines joining us right now to break down the numbers is michael grant. michael, thanks for being with us today was there anything you didn't like but the whole thing is to have the amazon prime flywheel where they're just offering more and more services to house holds those households are locking in more purchase behavior with amazon it just sort of feeds on it self >> the ecosystem that becomes

amazon i look there first because i know i can get it in two days and i can get free shipping. >> they're taking a lot of that extra profit and reinvesting it that as a household people might want to consume like media and that's just the consumer business which is going gangbusters. it's aws between what we see from microsoft, from what we see from all of these companies that they would end up giving that away. is that the thesis >> so far it's turned into a three player market. amazon is the biggest, microsoft's azure division is the second biggest and google is the third largest. you know, google also, you know, had really good numbers for its cloud business what we've seen so far is a three player market is probably okay in terms of pricing

you'll really see that show up in aws margins if pricing starts to get competitive any price drops to the bottom. >> if there was anything that worries you, what would it be? >> it's always coming back to the margins. it's a perpetual cycle of beating on the top line and lowering margin guidance you have to navigate as an investor of what will the market do on that news. you know the news is coming so you have to gauge where sentiment is >> 14.68 is where the stock is trading. what's your price target, where would people buy and where would you say beware >> we took it from 1500 to 1700. we kept our valuation metrics the same all on higher earnings estimates. >> okay.

so 1700? that's the next 12 months? >> 12 month price target >> we feel good. >> thank you for joining us today. >> thanks. how about now? are you done >> yes. >> maybe after -- after breakfast. >> this is breakfast >> breakfast of champions. >> breakfast of champions. wake you up, i'll tell you that. state and local budget restraints, high profile police involved in shootings this year has led -- recent years has led to a growing shortage of police officers kate rogers joins us now from hartford, connecticut, with that story. hi, kate >> hi. good morning, joe. that's right police officers are on the front lines of defense as you can see here at the city of hartford's police command center, but like many departments across the country, they're facing a growing challenge. that's hiring enough officers quickly enough to keep up with growing retirements. from rural areas to large cities like atlanta, san jose and houston, a growing number of police departments across the country are desperately losing

manpower facing decreasing numbers of officers and new recruits. one of the driving forces, an improved economy >> recruitment is always correspondingly more difficult when the economy is thriving >> add to that, state and local budget constraints and retirements. recruitment challenges vary from department to department but many are offering incentives like tuition reimbursement, signing bonuses and even rewilling to policies on prior experimental drug use to provide talent. >> as you increase recruitment -- >> there are high profile police-involved shootings. >> in the aftermath of ferguson, what's been characterized as the ferguson effect, there has been a challenge and reluctance where there's trust issues with the police to become involved in terms of a career with the

police. >> here in hartford they're short about 100 officers they're losing on average about 3 per month. they say they've been sounding the alarm on the pending issue for years, and now the new mayor and city council are just starting to take it seriously. hopefully they'll be hiring more and moorman power soon back over to you. >> okay, kate. thanks for that report tough situation. obviously we -- the men in blue -- >> and women. >> men -- that's what i meant. you know -- you want to talk about it either way let's get to andrew. andrew, what's going on? what's coming up, dude >> coming up when we return, the man behind one of the most storied franchises in sports history. yes, patriots owner robert kraft is going to be our very special guest as his team goes for title number 6 "squawk box" returns live from minneapolis, the site of ser

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the dow futures are down by over 200 points down 215 off the worst levels of the day, down 266 or so was the lowest i saw we're watching what's been happening in bitcoin that has come down pretty significantly. many double digit days in a row for bitcoin prices putting bitcoin below $8,000 $7,750 is the latest. >> unbelievable. >> in december we were above 20,000 it's been a rapid ascent and rapid decline. let's get back to -- >> tell andrew about it. >> so, andrew, if you were here, like me, you would have walked in to makeup and seen like some doritos in there, and i didn't know -- >> yeah. >> -- now -- i said i'm eating these. turn around. >> behind us there's all of this. >> they're ripping the opening bell i didn't realize that. the marketing officer -- >> save some for me.

>> i will. >> that's how smart they are let's put some in makeup like an idiot i'll go in -- >> it's like homer and donuts. >> or andrew and donuts. >> now they're behind us it looks like -- >> orchestrated. >> they're ringing the opening bell. >> knowing your audience >> i will say something for you -- >> guys, we have a very special guest and i want you guys to be part of this conversation this morning. we're just outside the u.s. bank stadium, of course, are with the new england patriots will take on the philadelphia eagles this coming sunday and it could mean a sixth lombardi trophy. joining us is patriots owner, robert kraft we're thrilled to have you here with us. thank you for waking up early. >> i wake up early anyhow. >> so this sunday, tell us, what are you going to do during the game what goes on during the game for you? >> well, it's pretty intense time we have close friends and family with us, and we're pretty absorbed by the game

even the a.d.d. focuses. >> is there a conversation you have with either tom or belichick before the game? what's going to happen on sunday afternoon for you? >> well, coach always gives me a pretty good overview before the game, and i've had a ritual for the whole time that tommy's been playing where i see him right at his locker before the game and we have a little chat. i can usually look in his eyes and see how we're going to do. >> you know? >> yes >> all right first of all, by the way, how's the hand, his hand >> his hand, given everything, his hand is pretty good. >> and when you say you know, have you ever looked in his eyes and felt like oh, this is going to be a tough one? >> yes. >> by the way, historically, when he's won, it's only by 6 points. >> well, the bottom line is, he wins and, you know, half of all games

are usually decided by 7 points and then half of those by 3 points so the margin of victory, especially when you're playing -- we're playing the best team left in football and in the playoffs you're always playing the best teams, and that's why usually the games are very close. >> the business of football, what does winning the super bowl mean for your team >> well, it enhances your brand. more people want to be connected to you they want to buy your gear you know, we have to have blitz for 6. you're not done yet. what's very interesting this year, it's the first time we have, excuse me, our own set called not done yet 24 hours, six days leading up to the super bowl we've had over a million impressions daily watching it.

just getting our local programming. so it's a way for us to brand more globally and people want to be a part of our team. you know people like to connect with winners. >> yes. >> so here's a complicated one for you because you have to think long term about this team and tom is now 40 and mr. belichick is now 65 years old. how do you think about the next chapter or can you even think that way >> sure. look, we've been thinking about that for ten years that evolves it's like running any business, you know you're going to have change and in the nfl one play can change things. tommy in the 30s 7 or '80 season the first quarter was out. some of his knee, he was gone for the season we had to have a backup plan so i think anyone who runs any business is always thinking about contingency plans and

backups. if you wait till it happens without any plan then you'll be in a tough position. >> you are on the tv committee, a big deal happened this week. you were on it, on the fox deal. $550 million on average over the next five years. we were talking about it yesterday. do you see these type of deals at this kind of price point happening in the future? >> well -- >> or is this a unique situation for fox? >> well, we hope there are a lot of unique situations for companies. it's about our product that's in great demand in terms of there's no other appointment in television that draws the way we do, and as we bring in more features and make it special -- think about it, the top program is in your sister company,

"sunday night football" i think for the last nine years has been number one the number two primetime is "thursday night. so anyone who wants to collect the big audience and promote other products and other shows, they want to be with us. and as you come into this diffused world of -- it's look at all the ways people are looking at programming and so many distribution channels it's nice to know they can go one place. >> do you see a moment, we talked about this, too, a tipping point where you could see it on an o.t.t., digital property owned, meaning the super bowl eye balls, audience sizes mat r matter do you have see a moment where netflix, amazon prime, facebook, or youtube becomes so large that they could take on and give you the type of eyeballs that you could get on an nbc or fox or cbs? >> it's possible you know, we've experimented with a couple differentplatform

going to continue to do that we know millennials consume a lot differently. a lot of young people i'm around don't have tvs, they're on their mobile devices you know, it's something that i've learned to do now where i never did. i was with some prominent people who own a basketball team and a hockey team, they have their devices out at dinner and it wasn't impolite. so however we can bring product that the consumer wants to them -- >> right. >> joe's got a question for you. >> bob, how are you doing? >> good morning, joe >> how you doing, my friend? there's nothing better than the revenge of winning to say i told you so, but that espn article, bob, how much of that was -- was real and how much of it was just -- i mean, i don't know how

to gauge things anymore. we've got things written by the trump -- i don't know what's real and what is truthiness. nothing's better than winning, but was there any of that -- did any of that -- is any of that true jimmy garoppolo's done unbelievably well out of san francisco. brady's plays until he's 60. maybe it would be good to have him then i don't know what's your comments on that piece? >> that's a long question. >> go on >> to answer your question, i think the bulk of that article was fiction, and i understand it you know, when you're doing well and you win well, you're a target and the other, i'm sure it's true at cnbc in your programming, you get very high ratings, well, every -- everyone has different ideas how you do things i don't think so-called tension

is bad in all the different companies we have, we have people with different viewpoints, but we get to the point where you manage it where it's not dysfunctional and we've had that for the 24 years that i've owned the team and pretty happy we've been able to hold bill and tommy together for 18 years i don't think there's any other franchise that's had a quarterback that long or a coach that long independently, but we collect good people and create continuity. >> joe and i and becky, we have our own tension, sometimes dysfunctional tension, too is there -- has there been more tension this season? just to put a fine point on it >> not -- not in my point of view you know, you have issues that come up. you deal with them hey, we went 13-3. we're playing in the super bowl. if we've had tension, please,

god, the good lord will continue to throw it our way. >> couple of other questions for you. i don't know if you saw this yesterday. c cbsles nunez and viacom may be getting together and talking is that good or bad for your business when you think of these type of combinations >> i think it's probably good. you look -- i mean, fox was willing to do the deal with us, and i think it was very smart of them and creative and they locked up something a long time, but they have scale and where they're going you look at disney is an amazing company now. you know, your parent company is so well run and has so many resources, and i think them getting together makes sense otherwise, they just don't have the scale to go out and do things that are important to do. so probably one way or another

it will happen. >> joe >> bob, i just wanted to follow up bob, you didn't talk about garoppolo. do you wish that you had kept him? how long do you think brady does play will he go to 45, do you think, and still be bringing home those rings? >> well, i know you have a direct line to gisele and that's probably the best way to find out how long he's going to -- no, he's going to play, please, god, as long as he wants and, you know, jimmy garoppolo is a great young man. he trained under us. in the end we have a salary cap so we can't spend money at different positions. he was a free agent really he was in the last year of his rookie contract. we would have had to pay him a lot of money to keep him we would have liked to have kept him, but that's part of the nfl. but people come out and make stories and then it's like fact, and that isn't so.

but we have other players at other positions like that. >> right. >> but tom brady's doing okay. >> one quick question, which was joe talked to president trump last week on the air after you came out in support of your team, which was against to some degree the president, did you ever have a conversation with the president >> we -- i keep my private business private i think we should always be respectful of everyone's point of view and if someone doesn't think that way, but they're still doing a good job we try to let them know privately. >> bob kraft, good luck on sunday. ha y. ou >> thank you so much >> are you rooting for the patriots >> you know who i'm rooting for. >> we're back in just a moment

breaking news this hour. minutes left on the clock until the super bowl of economic data, the january employment report. the numbers and the instant analysis from our team of experts straight ahead plus, what the report means for the markets, the trump economy and the fed's next play. and hitting the field. i'm live at the site of super bowl lii with newsmakers pacing the sidelines. arizona cardinal live receiver

neil fitzgerald and kneel cash carry joins us live as the final hour of "squawk box" kicks off right now. ♪ ♪ live from the most powerful city in the world, new york. this is "squawk box." good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square i'm joe kernen along with becky quick and our in-house super bowl expert, andrew ross sorkin, is live in minneapolis ahead of the big game we're going to check back with him in just a couple of minutes. kraft was okay those are -- people want to know that stuff, right, andrew? >> absolutely. bob -- bob was a great interview, a great conversation and i know he's hopefully -- hopefully will come back and we'll see him in new york maybe when they're champions jim cramer by the way is around here now, too.

>> i'll bet he is. >> if there's an altercation, i'll let you know. >> andrew, remember when president trump was talking about the tax plan, i was talking to one of my friends, who said, don't give me any tax cut. just give it to -- just give it to the working people, and, you know, then you would think from the other side that's all he did was give it to rich people, right? i don't know what finally happened i don't know what bob would say about that they'd probably say the same thing, let's keep that personal stuff personal >> no, no, i think he'd get involved in that conversation. we'll try to have that -- we'll have that conversation with him. >> let's have him back on. by the way, it's been a while. >> did you notice, today is a perfect day for al michaels to be introducing the show. >> it is you're right. >> that great voice. >> you heard bob one of the reasons "sunday night" is number one, al michaels and collinsworth are great. they really are. they're so easy to listen to i was going to ask you one more thing but now i forgot what it was, andrew. you know the jobs report is coming this morning. >> i heard

i heard. we new cash carey is going to come back. this is where he lives >> he's a linebacker, right? who is he again? oh, no, that's somebody else. >> cash carey. >> yes 30 minutes away from the january john report. nonfarm payrolls 1677,000 versus 148,000. unemployment expected to tick it down i remember what you're thinking, andrew you don't want to run into cramer i saw you just doing the fist bump with bob kraft. you sort of copped to hoping for the patriots you don't want to be anywhere near cramer. >> he -- we're going to -- i'm going to see him he's going to be coming on here so we'll see him. >> it's the tension. that's the tension you were talking about. >> just a little bit. >> yeah, that's the tension. >> all right let's get a check on the markets this morning the futures have been down all through this morning's session you're going to see right now

that it looks like the dow is down 230 points below fair value. this puts the dow on its worst week in quite a while. s&p, too down by 16 points. nasdaq off by 26 it's all coming as treasury yields have continued to climb check out what's been happening this morning in the treasury market the ten year is now yielding 2.784% we got all the way up to 2.8% earlier this morning you're also taking a look at the two year yielding 2.513% that's the only one where yields have come back. >> merck is out with its earnings beat estimates by 4 cents. profit was 98 cents a share. revenue did fall slightly below what the wall street forecast was. the company gave a full year outlook that was largely above where analysts had been for the full year. >> also making headlines today, apple beating the street but the tech giant offering weaker than expected guidance for the fourth quarter. apple downgraded by two points this morning to neutral from buy at key bank and at bernstein

key bank says soft iphone sell through suggests a saturated market bernstein lowering the price point from 195 to 170 citing a weak iphone cycle. other people have pointed out this is the best quarter we've ever seen from apple, the most amazing thing that they've seen through the numbers and stock this morning is up by 52 cents also check out shares of amazon. the tech giant topping expectations as the company recorded the biggest profit in history last quarter that stock is up by 6% this morning. that's another gain of $86 alphabet missing on the bottom line revenue held strong thanks to the growing ad business that topped $32 billion the internet giant alphabet announcing that john hennessey will be the new chief and the stock is down by 2%. you remember years ago when we noted that exxon made $10 million in a quarter and we

talked about it. 10 billion in a quarter. >> 1 billion in a quarter for -- >> 10 billion -- >> for amazon this time. >> apple is 20 billion. >> yeah. >> 20 billion in a quarter that's twice as much as what we used to think. >> it was a big number by the way, that was one that was much more reliant on crude oil prices on a commodity price than something you weredoing >> yeah. >> hasn't been there bernstein, ceo >> senior policy adviser then there's -- you know, we've got to draw the line somewhere. >> same topic? >> that's too much that's too much. something's got to be done i'm kidding, garrett >> oh. >> we'll be back with you in a

minute. >> you thought i was serious you were nodding joe, you're coming around. and now center on budget and priorities, senior fellow and a cnbc contributor, this is michael strain, aei economics policy studies director. you guys are -- rich is going to be here for a little bit longer so i'll start with you jared, where are you on the economy right now? you must be -- as an american you must be plieased with what' happening. are there warning signs? dislocations that have you worried about the quality of some of these? >> i think the economy is in somewhat of a goldilocks place i think the job market is particularly solid i'm looking for the unemployment rate to fall further this year in part due to stimulus from the tax cut. we can argue about whether that's more canes than laughter, but that's a fine argument to have that said, if there's anything that makes me nervous, keeps me up at night, it's less about kind of the real economy than

something you just talked about. as the ten year yield rises along with the deficit and the debt, the amount of debt service is going to creep up now that's not a fiscal tragedy. you do have to worry about the debt ceiling, that's just a political mess dealing with those folks behind me, but i do think that the -- look at it this way, 40 extra basis points on the ten year note when you're at $15 trillion in terms of your stock and public debt adds about 60 billion to your debt service. that's not trivial that's not an emergency. again, the economy is percolating along, closing in on full employment. i have faith in the new fed, but that's the one thing i worry about. >> let me ask you a theoretical question i don't know how many times you've heard it, i've heard it if rates go up for the right reason, then -- how many times have we heard that is that just -- is that just lip service and then the guy that says it is calling his broker saying, get me out, because it's a fact of life the debt service goes up. ray dal yes over in davos said

that's the one thing that really concerns him if we got to like 4%, that could be hard to service a lot of the outstanding debt. >> yeah. i mean, i don't think -- i guess i don't know that it would be hard to service. remember, our debt service is somebody else's income so there's two sides to the equations. >> right >> interest rates have been on the fore for so long, we have central banks raising rates. this is not a surprise i just think when you're out there looking at the economy, you can't ignore the dissaving in the public sector, it's especially concern to me and here we disagree, i want to spend more revenues on things that i think our country wants and needs, including public infrastructure. >> we definitely agree on that how would you like to divvy up 4% gdp growth with all of these great things that you've got in mind, all of these great social things. >> i don't see that coming. >> i know you don't. just theoretical 3%, 3 1/2. if you can divvy -- when you have growth, all the things that

you want to do become a little bit easier to do. >> no doubt. >> michael, there's nothing to disagree with with jared today i don't know what do you think? >> well, that's exactly what i was thinking you know, jared is i think spot on i think we are kind of in goldilocks moment right now. the labor market is looking strong gdp is, you know, looking good as well. if you want to look for some dark cloud, you can look at some trends that may or may not be concerning in emerging markets and around the world there may be some imbalances there and that could obviously spill over into the u.s. economy. you could be concerned, of course, about whether asset prices are overly valued but on the whole i think we're looking good i also share jared's concern about debt and i think that's an important thing to be concerned about, and all the more reason to reduce entitlement spending. >> bernstein is now a -- you're like a buy side guy. >> which bernstein >> oh, yeah, that's right. >> you're surrounded by

bernsteins. >> this is where we need it. >> go bernstein. >> as a buy side guy, yeah, and -- what was the last number you crossed for bernstein you're managing now >> about 7 billion. >> 7 f'ing bill, that's awesome. do you -- you heard that are you 100% invested or do you look at the 2.8 and raise some cash >> no. i think the risk is really in the fixed income market, which is what the three of us will agree on right now the equity market, earnings are doing well it's kind of interesting that you have jared and michael agreeing to meet that other signal that we are in a later cycle environment, right people in the early cycle are cautious. >> cats hanging out with dogs? >> right exactly. all of that. here we are in a late cycle environment. what's characterized by a late cycle environment. bottlenecks the economy, rising pricing pressures and nominal growth continues to accelerate guess what's happening all of that is happening and the ten year is at 2.80.

>> jared, do you want to be the cat or dog >> i'd like to ask my bernstein -- >> are you -- >> i don't like cats. >> i want to ask my bernstein linesman, do you think stocks are over valued? what do you think about p.e. ratios creeping up >> we have to wonder why are rates going up rates go up because the nominal economy is stronger. earnings are nominal so there is a tradeoff here between rising rates and earnings growth. i think we're fine in the stock market as long as earnings growth continues to accelerate, which it is doing. i think people have forgotten that if earnings growth does continue to rollover. >> that brings down the p.e.s. that's fine. that's a healthy way for them to come down. >> i agree. >> this happens many times in history which people forget. >> gentlemen, thank you. we have earnings from exxon apparently so we have to get to that. >> we just mentioned exxon a moment ago the earnings are in from dow component. the energy giant reporting quarterly profit of 88 cents a

share. that was well below the consensus of 1.04 cents a share. revenue missed as well production down by 130,000 barrels or 3% during the quarter. exxon mobil said that it would be investing over $50 billion in u.s. operations over the next five years supported by what they call an improved business climate created by tax reform. the stock is down by 2.75% it's $2.50 lower when you talk about the numbers, still earning $8.4 billion. >> yeah. >> fourth quarter and almost $20 billion for the year. >> 20 billion, that's pretty good unless you're apple in terms of 20 billion in a quarter. >> quarter when we come back this morning, preparations are underway in minneapolis for sunday's big super bowl game andrew ross sorkin is there. andrew, what can you tell us >> hey there we've got a lot coming up. larry fitzgerald, wide receiver for the arizona cardinals is

here we're going to talk to him about the big game and sponsorships and neil cash carrie a lot coming up on "squawk box" live minneapolis ahead of super bowl lii highest in investor satisfaction with full service brokerage firms... again. and online equity trades are only $4.95... i mean you can't have low cost and be full service. it's impossible. it's like having your cake and eating it too. ask your broker if they offer award-winning full service and low costs. how am i going to explain this? if you don't like their answer, ask again at schwab. schwab, a modern approach to wealth management.

welcome back to "squawk box", everybody. we've been watching the markets this morning, and on this jobs friday with less than 14 minutes to go for that number we are looking at the futures under quite a bit of pressure. dow futures down by 236 points nasdaq off by 33 take a look at what's happening with the early trading already taking place in europe we're still in our pregame moments here over in europe they have a few hours under their belts and things are not great as well, at least not if you're a bull dax down by 1.4% and spain is down by 1.5% almost. the treasury market at this point, the ten year is still sitting just below 2.8% at 2.786%. >> or you could be in bitcoin. >> think we've seen volatility here, check things out

price of bitcoin down by another 8% this morning. earlier we were actually looking at bitcoin down below $8,000 this morning right now it's sitting at $8,380 at least on the cboe that's what we will continue to track as well. it is ground hog day it looks like we're in for six more weeks of winter. >> ahhhhh! >> he saw his shadow it was raining there. >> what drives me crazy is you're always going to see your shadow with those tv lights on. >> there he is punxsutawney phil. he saw his shadow. >> dilly dilly. >> dilly dilly. >> don't drive angry that has become a classic. the pennsylvania ground hog was wrong last year. but obviously that's not going to disqualify him from being on this show. he did see his shadow, but both february and march were warmer than average across the nation >> again -- >> that was not talking about

you, rich. >> the media and the cameras, we mess up our experiment every time with this how can you ever expect any reality when you put all the tv lights on. >> yeah, that's true. >> going to see his shadow every time. >> is bill going to come on this year >> talk with him on sunday. >> because he's going to wear some bell bottoms. trying to bring back bell bottoms. >> bill murray >> yeah. >> that movie has almost become a ground hog -- people watch it -- i watch it over and over and over and over and it's -- i don't think they knew -- a lot of times you don't know when you're doing something that it's going to resonate with people. there's themes in it that you can learn from it's amazing. >> i like the insurance guy. >> he's a xavier fan. >> yeah. >> phil. >> phil. >> bing! >> yeah, exactly he did -- going to go pro with that bellybutton thing that he does, remember up next, arizona cardinals wide receiver larry fitzgerald, who i was checking which

commercial i like best he's got a lot of sponsorships he's hanging out on the sidelines. he's going to join andrew live in minneapolis later we'll sit down -- no, andrew, sorry, larry will leave probably and andrew will sit down with minneapolis fed president neel kashkari. he's happy there we'll be right back. arket when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today. fidelity. that's it. i'm calling kohler about their walk-in bath. nah. not gonna happen. my name is ken. how may i help you? hi, i'm calling about kohler's walk-in bath. excellent! happy to help. huh? hold one moment please... [ finger snaps ] hmm. the kohler walk-in bath features an extra-wide opening

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welcome back to "squawk box" this morning live in minneapolis ahead of super bowl lii our next guest wrapped up his 14th season in the nfl when he is not officially on the field he's working with visa that's what he's doing here. want to welcome larry fitzgerald of the arizona cardinals to the table. >> great to have you. >> you're watching the game. there's some players who come and like leave. >> i enjoy the pageantry the energy is second to none it motivates you to try to get back yourself. it's going to be a wonderful game these two teams deserve the opportunity to be here. >> okay. are you willing to come out one way either side? who do you root for? >> no. as a player for me, i have friends on both teams. i want to see everybody stay healthy and i want to see a competitive game for 60 minutes. last year's game you couldn't

have asked for a more, you know, thriller, i mean, coming back from that and watching tom brady do what he does. that was exciting. i hope sunday's just as exciting. >> let's talk business you are here working with visa. >> uh-huh. >> what are you doing with visa? >> they have just come out with a new contact list way of payment and i think it was fantastic. yesterday we broke in a cafe in minneapolis. we were able to interact with some of the fans, local people coming through the restaurant and showing them some of the new technology that's been unveiled. it was really exciting and everybody had a wonderful time i was able to get out and curl a little bit, an olympic sport going to seoul here in a couple of weeks this is really fascinating. >> how do you get hooked up with visa >> i think it was, you know, they reached out to me and, you know, obviously i have a great deal of respect for the company and, you know, mr. kelly, the ceo, is a friend of mine we play golf together.

they do some wonderful things all around the world it makes it much easier for the consumers. >> are you an iphone man android man? >> i'm an android man, but i also have an iphone. so i have both of them >> and when you think about sponsorships, i imagine people come to you constantly how do you sort through it how does it work for you >> it has to be organic. there has to be some synergy there. i think visa and what they represent especially from a charitable side, they do wonderful things all around the world. it's an honor to be associated with a brand as strong as visa i enjoyed working with people and their associates are fabulous to work with. >> you've been very public as a public supporter and friend of john mccain. >> uh-huh. >> have you talked to him recently >> i have not talked to him. i've talked to some of his associates and, you know, he's in great spirit and from what i hear, he's resting and trying to get healthy. >> what have you made of the politics of this season?

because it feels like the politics have entered football >> uh-huh. >> and people have to either be outspoken or not outspoken how do you deal with that? >> i try just to be honest with myself and how i'm feeling, but also have to realize that, you know, whatever you say is going to be scrutinized. there's no right or wrong way to view it. >> right >> i think you just have to do what's best for yourself and try to represent yourself the best way you can. i don't have a, you know, particular issue with anything they did i think the message was a bit construed and i think that's where it kind of took a bad turn. >> we've got to go but are you playing next season? >> i don't know yet. i'm still taking time. >> what specific hints >> little checklist i go through. i want to make sure i'm doing everything i need to to get myself prepared. >> have fun on the links in the meantime. >> got to do it one time. >> appreciate it. >> thanks for having me. >> absolutely. guys, we are minutes away from the january jobs report we're going to bring you those numbers and instant reaction in just a moment. stay tuned we're live in minneapolis ahead

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welcome back, everybody. we are just seconds away from the january jobs report. we are looking for a number of 177,000 jobs added unemployment expected to be at

4.1% take a look at the futures this morning. believe it or not if you're just waking up, we are coming well off the lows earlier this morning the dow was down 260 points. right now the dow is sitting 186 points below s&p down by 15, nasdaq off by 33 ten year has been steadily creeping upwards towards 2.8 percent perfection let's get right to hamilton pearson who has the numbers. >> 200,000, january nonfarm pay rolls increased by 200,000 jobs. the unemployment rate is 4.1%. average hourly earnings entries .3 of a percent month over month the year over year increase is 2.9% the revisions, we had an -- overall a net decrease of 24,000 jobs from what had been reported for the previous two months. private sector job growth in january an additional 196,000 jobs added to payrolls job gains in terms of leading sectors, construction up 36,000,

food services up 31,000, health care plus 21,000 new jobs. the only significant job losses, we had information jobs losing 6,000 workers. nondurable goods off by 3,000. the labor force participation rate now at 62.7%. the u6, real unemployment rate, 8.2% african-american unemployment increased to 7.7% in january, up from 6.8% in december. this is also the month where we get the annual benchmark revisions from the bls for the baseline month, which is march year over year, the effect was minor. there was an increase of .1 of 1% 146,000 additional jobs. seasonally adjusted taking that number to the year-over-year revision, an increase of just 118,000, just under 2.1 million

jobs for the entire year again, benchmark revisions very minor when you look back at the overall last year of employment gains and losses back to you. >> all right hamilton, thank you very much. folks, let's take a look at the reaction we're getting in the market we have suddenly gone from that cinderella story where bad news was good news to the position of the opposite where good news is bad news, at least in the knee jerk reactions of the market check this out, dow futures down by 230 points below fair value just before the numbers we were looking at the dow down by 189 points immediately on the numbers that were better than expected, 200 job increases versus the 177 that the street was expecting. we saw the futures drop, and that is happening exactly as we watched a big jump in the yield market take a look -- what was driving this was a big gain that you saw in ten year yield. see the spike that you saw pushing us above 2.826%.

really interesting knee-jerk reaction let's hear more from our panelists on all of this richard bernstein, michael stray, jared bernstein, rick santelli and steve liesman are with us. steve, quickly your thoughts on the numbers. >> my thoughts are you didn't put up my prediction of 190,000. >> it's on the board you don't get close like that. i this i they're going to put it up now this is a good number, a solid number i like the broad-based nature of job gains here construction may be a little flatter, perhaps by the better weather for that one week in january that happened. overall some funky seasonal stuff where essentially you lost 25,000 retail in december and you were up 15,000 in other words, you didn't hire as many seasonals as expected. there it is, liesman, 190, i don't know if that was the winner, thank you very much, verifying it in the back there not the most important thing as becky suggests temp help, not so good

leisure up by 35,000 solid job market and i think we have to start thinking about this problem we're having, which is the good news being digested by the market as bad news. >> right let's get to rick santelli for that and the market reaction rick, what are your thoughts >> to me it's all about wages and it's bawl the potential to push the envelope on inflation at a time where everybody's keying on interest rates already. stock market's ripe for retracement already. these pieces are well mobilized on the game of risk here, and i do see yields getting -- this is a weekend with momentum. anybody off sides is going to be covering up. listen, there's a -- >> nice football reference >> and we've said all year long with regard to what's going on my pick, by the way, was 206,000, so little bit closer than steve i would really also pay attention -- >> you were over prices right rules, rick. >> that's never -- >> yes, it has. >> no, you win the money

i'm closer to the number that's all i care about. the yield curve is steepening, and i think that is both the good and bad thing that's going to embolden the federal reserve a bit if that's your cup of tee, but i also think it does take away some of the immediate notions of some of these inversions but, yeah, wages not only are wages great, we have positive revisions to wages last month as well. >> rick, i want to bring rich bernstein in here. i was just thinking, rich, you get 45% in the equity markets in a year, 45% on something that's at 17 or 18,000. i mean, that is a big, big move, right? >> uh-huh. >> and it's presumably on the hope for better economic activity. >> yes. >> when you get to 2.80, i can understand you pull back a little should anybody really be surprised? is it a big deal if it comes down 3 or 4% from being up 45? >> well, i'm not quite sure how

you get to 45 but that's okay. >> november 8th and the dow. >> november 8th and the dow -- >> oh, you're talking about the 16th >> yeah, from the election. >> got it. okay no, i've got it. look, we just had a great month. january was a great month. >> you try to forget that. >> no, no, no, no. >> you just wipe that day from your memory completely november 8th >> we've been max equities i don't care who's president. >> okay. >> but -- >> i get your e-mails. >> but i think january was a very big month, right? and anything that upset the apple cart when you've had such a big month. it's just a natural process. however, as i said in the pre-game interview, using football analogy -- >> there you go. everybody's doing it >> right we have to remember why rates are going up, and rates are going up because the economy is healthy. and if earnings are going to take part in that, i guess people are worried about that with wages going up, margins may be under pressure.

if earnings are going to go up, the stock market can withstand this if earnings are not going to go up then, yeah, you'll get a correction our bet is that earnings are still quite strong. >> rick, how long have we been looking for, you know, finally going to 3%? how long have we been waiting? now we're at 2.8 you know what i'm saying go up 45%. should we be surprised, rick, either that we're starting to move up in rates or that this -- you can't believe how long it's taken, can you central bankers have stayed low for so long. >> no. look at all the surveys over the last seven years pretty much every year everybody on the annual list and economic side, there's always some holdouts thinking this is going to be the year this is the year we're going to do it. we're here i couldn't agree with you more, joe. the people on the street have never seen a bear market in interest rates doesn't mean one can't happen even at 2.83 where we're at now, when you think about we're at

25.9 on the stock market, and that's all we can garner we haven't even been up to 3%. when you think about it in those terms, it's quite remarkable. >> rick, isn't it a concern about the risk here? when is the last time something adjusted perfectly to the economy? these things have a tendency to over shoot we can make a very logical case, as i did a year ago when i thought the ten year would be 3% by the end of 2017, well, it looks like it will be off by a month or two, but no sense at all that it should exactly calibrate at 3%, that maybe it over shoots for a bit. and also i think there's some fear out there, we see this in our fed survey, of a fed mistake. the fed goes too far or -- >> another one you mean more fed -- more fed mistakes beyond all the bubbles they've created, beyond the squashed yield curve. >> wait a second >> the interest rate compression? >> i thought we were trading on the boom here. is this a fed boom or is this a truck boom >> if you want to play politics,

let's talk about the number, okay okay i'll tell you the boom the boom is people are doing better the fact that the trump rally built on a bubble of the previous administration and the fed where they financed deficits by keeping rates too low and this president's probably going to get penalized because they're actually giving real growth to be able to normalize, is that the conversation you want to have >> absolutely. >> let's bring michael and jared in here, too jared, let's talk just briefly about these numbers and what the wage growth is telling you, too. >> well, that's precisely the number i wanted to zero in on. maybe steve can tell us the last time we had a 2.9 pop on the hourly wage. i'll bet it's a while. >> a long time. >> i think you're exactly right, bec becky, that this is the moment where what's good for main street looks scary to wall street there's a variable that's been missing from this conversation, and that's inflation i think we're seeing a hedge against the inflation premium there over in bonds, and i guess that makes sense to me

this kind of wage growth could spook the fed and add another wage increase. that said, what we really haven't seen in this economy is wage growth mapping on to price growth so we're going to have to wait and see how this plays out in the inflation world until we get a real beat on what this wage acceleration means if it persists >> that's right. >> may 2009. >> may 2009 since we've seen a number like this >> michael, how about you? your thoughts on this number what are you taking out of it? >> i think the big number is wage growth. if you bet on 150 to 200 jobs per month over the last many, many years you would be right. and we saw something similar in january and so, you know, the employment figures are kind of right where they've always been. what we've been waiting for is wage growth. today we saw wage growth that's healthy, that's trending in the right direction and i suspect this will have some implications for the fed. this increases my view that we're going to see an additional

rate hike in 2018. >> can i get one thing >> go ahead. >> i think today is a coming of age day. i think from this point forward inflation will be a word that people use a lot, and i think it's -- inflation expectations troughed in june of '16. it's been a year and a half that ip be flags expectation has been rising this is now going to make them accelerate inflation will become a headline word as we go through 2018. >> you're predicting -- >> what you're predicting in nerdy terms is a steepening of the phillips curve, the correlation between job market tightness and inflation. that's been a very flat curve. >> yes >> it's actually kind of -- people who have predicted a steepening there have often been disappointed you might be right this time could be different. >> jared, i just think -- >> it's pretty flat. >> if you look at this cycle, everything has happened the way history would suggest. it's been elongated. things have taken much longer to occur. >> fair point. >> i basically agree i wouldn't like to use the word

nerd to refer to myself. yes, i agree with you on that. >> i don't mind using it for myself come on. embrace the nerd. >> i mean it in a nice way. >> you don't think you're a nerd you really don't think you're a nerd >> all right all right. all right. >> worker wages going up are not necessarily inflationary the connection between inflation and worker wages is tenuous at best and especially when worker wages go up commensurate with productivity, it's not a problem. and there's a lot of catchup to happen when it comes to the worker wages and productivity gains. >> a lot of this depends on your view of slack, and if you still think the unemployment rate can fall by several tenths of a percentage point, which i do, then we still have some slack left in the labor market so you wouldn't necessarily expect price inflation to be happening, you know, next month or something like that >> right. >> there is a level the unemployment rate is going to go to, and we're going to see commensurate increase in prices. >> i would not be worried about

wages if they were in the 3 to 4% range. >> we have to wrap this up this is an argument we will continue to have over the many, many months. >> discussion. >> don't worry embrace the nerd no, you just say 7 billion in assets under management, drop the mike and walk out. thank you for being here thank you, everybody we appreciate our panel today. >> i took a picture. are you a vampire? you don't walk by a mirror yes, he is when we return -- >> breaking news. >> 7 billion two words for you. 7 billion. you don't want to come on anymore? you don't have to. >> no, i'll come on. i'll struggle. >> when we return, minneapolis fed chair neel kashkari. check out the futures. they're down kind of in between where they've been down 250, down 180 now we're down 205

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box. we are live in minneapolis ahead of super bowl lii. in the meantime, the january jobs report just out u.s. employers adding 200,000 jobs that's more than what some economists were expecting. we want to show you the futures because we are down triple digits down close to 170 points nasdaq off 25.5% and s&p 500 off 14.5 points. we want to bring in neel kashkari we are in his backyard for his take on the jobs report. mr. kashkari is minneapolis's

fed president. >> thank you for having me. >> thank you for us to come to you this time. these jobs numbers, it looks like the market's taking this as a good news is bad news situation. >> right. >> and the bad news is that interest rates may be going up >> well, the most important thing that i saw in a quick review of the jobs report is wage growth. we've been waiting for wage growth everyone has been declaring we're at maximum employment. more americans have been coming in but there hasn't been much wage growth. this is one of the first signs of seeing wage growth picking up that's good for the public as a whole. i think it's good for the economy overall. i do think if wage growth continues that could have an effect on the path of interest rates. >> take us inside the room you voted against every interest rate hike. >> i did because we've been under shooting our inflation rate target for basically ten years and there's been very muted wage growth. we're trying to assess supply and demand in the market if you want to assess that, start by looking at the price and the price of labor, wages, had not been climbing.

this jobs report now at least shows some signs of wages picking up. >> where are you on gdp? what's the neel kashkari view of the world? >> i'm surprised by how much optimism is coming from the tax cut. can it boost gdp this year yes. is it going to lead to long term upshift in gdp too soon to tell much more important from my perspective, when are we going to reach maximum employment? how many more americans are going to re-enter? one very important metric is the prime age of the workers the average age between 25 and a 55 who are in the job market we have not recovered to where we were before the financial crisis that says to me there might still be slack in the labor market but the wage measure is important. >> in terms of wage inflation, we have seen a number of companies come out post the tax reform plan and say we're going to give bonuses, salaries, has that surprised you >> a little bit.

i think they're playing to the political moment and saying we're going to do our part, give one-time bonuses more compelling to me is the wage increases themselves, whether it's some company saying we're going to boost the minimum wage or cities boosting minimum wages. those are going to have longer term effects on the overall trajectory. >> you've been very outspoken about immigration. >> i have. >> the impact immigration will have on the economy and perhaps a misunderstanding that the president or administration may have on that issue >> well, there are two sources of economic growth productivity growth which is very hard to forecast and population growth. higher population growth means more consumers and more workers. our working age population has flat lined over the last decade because we're not having as many kids as we have had in prior decades. we can accept slower growth, subsidize fertility, free child care or we can embrace immigration. that's math. politicians can debate all they want which one they prefer, i'm just laying out the math

at the end of the day, math always wins. >> right so we have this tax cut and that may be a temporary stimulus. the other thing we've talked about is the potential for a big infrastructure plan. the president talked about it in the state of the union i think you seem to have a mixed view of a mixe view of infrastructure we subsidize by large part by the state which i think you are against. >> generally, nfl and these guys are smart. they play cities off of each other. >> by the way, when i heard that amazon, minneapolis is not on the short list, my researcher says to me, we dodge the bullet. i am betting jeff bezos knows where he puts his second head quarter. i think that's a money losing investment forte taxpayers

>> you think anybody that wins the head quarter location two is going to be a loser? >> lets see how big of a check they right >> jim cramer is going to join us for the fun here on his take. lets take a look at the futures, we are in the red triple digit still. we'll be right back with "squawk," ahead of super bowl l 11. let's begin. yes or no? do you want the same tools and seamless experience

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welcome back to "squawk," we are live in minneapolis ahead with super bowl lii. usually we'll go to the stock exchange and here we are is cold >> i am not sure if you understand the significance of that shirt that's just any number >> what did you say to bob kraft? >> you did i wished him the best of luck.

>> one is to do the show and the other is to cheer. >> shall we talk jobs? >> yes, lets do that there is a lot of sentiment when i tell you that this is a good number i am always conscious that we genthn get nervous about a little bit of growth. there is not much inflations so interest rate can go up on this. >> i think that the overall productionnumbers are good but it is not like we sit here and say wow, this is it. by the way, when you hear anyone say we are up 2.8 now. the 2.85 on the tenure, i think it is very unnescessary. >> it is been a tough week are you going to buy on the dip? >> you buy amazon on the dip but it is not dipping. you are wearing the jersey that people say that about. that's kind of what's happening and amazon is going to define this market. >> joe

i think i am going right here. >> i am here >> i thought we are supposed to short amazon at a thousand or short at 1500 or can we short it at 5,000 where should we short it >> your sentiment is so right, there is still a disbelief that stock can be up here the conference call of the thing of beauty of advertisementadver. >> we covered at 990 >> thank you, andrew, you look good in that i see you came off the line now. >> and don't miss the big game on sunday, live on nbc's ""squaw

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to check out >> we saw things going from down 260 to 189 before the number that was better expected 10-yr picked up on that and as a result futures came down >> who knows what it will be by the end of the day >> next week is pebble beach week >> super bowl followed by pebble beach week >> make sure you join us on monday, "squawk on the street" is next. >> doubling down on sports ♪ good morning, welcome to "squawk on the street," i am carl quintanilla with jim cramer, david faber is back at the nyc, we are in minneapolis >> good morning guys, nice to see you, you do see we are down on the majorve