♪ live from new york where business never sleeps, this is "squawk box. good morning welcome 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 is in pyeongchang, south korea at the winter olympics good evening, andrew >> good evening, good morning to you. >> andrew will bring us the highlights from last night's action let's get to the markets after a day when the dow closed 250 points lower, it was dragged down by walmart's worst one-day drop in 30 years all the way dak back to 1988 what happened on that day back in 1988? it was a drop of over 10%. >> safe to say it wasn't online sales. >> no. that hit things this time around we'll talk about that.

a decline of 10% yesterday because of disapointrtificial intelligen disappointing sales they have been changing their strategy >> are they on the right track if they get the inventory right? >> i don't know. they've been seeing phenomenal growth for the first three quarters of the year 25% for the fourth quarter because of televisions and electronics instead of the every-day items. >> it says here they had so many tvs and toys they ran out of toilet paper they had no toilet paper to sell, okay >> which is important for a basic store like walmart >> do the maslow hierarchy of needs, survival, food. before the big screen tvs and

surround sound, there is the toilet paper >> it's not just the inventory issues, it's focusing on customers, they've been spending on marketing, trying to bring in urban, younger customers now focusing more on the basic customers and bringing them in to walmart.com >> does amazon know how to do this better than walmart >> amazon has had some practice. we will look at the u.s. equity futures. after those declines for the dow yesterday, you can see the dow futures are indicated down 42 points this morning. s&p futures indicated down by 5 points the nasdaq is indicated higher wi it was down yesterday, by just barely a lot can change between now and the opening bell but all kinds of things we're expecting today, including the fomc minutes that could dictate which way we go in trading. overnight in asia, the shanghai

is still closed for celebration of the lunar new year. the nikkei was up by 0.20% the hang seng up by 1.8% and the kospi up by 0.60%. let's look at european equities. across the board red arrows. the dax down by 0.7% declines in france and in london as well as in italy and spain. checking out treasury yields, not sitting at 2.9% where we were touching near yesterday the ten-year at 2.88%. >> the "journal," bond yields near 3%, a turning point for investors. so there's an editor or something, he's a manager who decides -- >> you love the editorial process. >> i do. i was never in print someone says -- hethey're sitti around at the meeting, someone says, you know, this 3% thing

might be something we should write about. >> we did talk about it yesterday. >> we talked about it for five years, 3%. so this becomes front page in the "wall street journal." >> it is a time when you will reassess whether you want to be in stocks or bonds we have this conversation every day. >> they assign it, a guy makes some calls they get comments. i bet they quote a couple of guys >> you were here first, joe. >> okay. here are some of the big stories we're watching in retail news, amazon has quietly launched an exclusive line of over-the-counter health products, and it could challenge retail pharmacies like cvs and walgreens and spark a price war. amazon doesn't own the products, they're made by perigot, but this does put the company in position to squeeze other retailers margins. amazon launched the basic care

line last august and it included 60 items ranging from ibuprofen to allergy medicine. this is interesting. apple is now considering going right to micners, miners that michb t mine the cobalt. the tech giant is seeking to buy several thousand tons of cobalt. why? it's used in the batteries that power the iphone the price of cobalt has skyrocketed because of increasing demand for electric vehicles powered by rlithium-io batteries. this is why if an asteroid comes close to earth, we have to send ben affleck and bruce willis up there to mine the cobalt >> while they're making sure it's out of our orbit. >> aerosmith singing about --

>> liv tyler >> so her father was singing in a song about missing ben affleck, right >> yeah. >> all right shares of lending club -- supposedly it would ruin the global economy if we harnessed all that stuff, there's so much precious stuff on those aster d asteroids, the value of what's on them eclipses what everything else is worth today. bitcoin would still be worth something. shares of lending club were down big after the company reported their results they posted a miss on the top and bottom lines the net loss increased mainly due to litigation settlement expense of 80 million. the lending club ceo has been trying to repair the credibility of the company since an internal probe in 2016 found that the online lender falsified documents when selling loans to an investor.

shares of lending club off more than 30% >> an update on trade for you this morning the final version of the transpacific trade deal was released overnight pore thaf more than 20 provisions have been changed including rules around intellectual property. the original deal went into limbo early last year when president trump withdrew from the tpp. the 11 nations remaining in the deal include japan, australia, canada and mexico. they are expected to sign that deal in march. >> joining us now is jeff south from raymond james, and michael tyler, chief investment officer at eastern bank wealth ma manageme management jeff, we got 12% in intraday correction six straight days brought us back down to 4%. after yesterday's move we're down 5.5%.

i know llong-term it doesn't matter to time these right, but do we test the lows? do we get close to 12? do we go through 12? do we not get to 12? what's happening here in terms of wringing out some of the bullishness? >> i said on friday on cnbc that it would be tough to get above 2750 the 20-day moving average was 2754, which is where the market peaked on friday it will take a couple more hits against that level to get through. any pullback will be contained the s&p rallied about 220 points to give back a third of that that brings you back to 2680 to 2700 that's all you get then i think we go up and crack 2750 >> someone that might follow technical, a lot of 50% retracements both up and down. we get the move down, then a 50%

retracement back up. then another 50% retracement of that 50% retracement it all takes time for these things there's rotation within the stock market itself while all this is whatting happening i guess that slowly wrings the bullish sentiment out of the market which is probably what we need >> i have never seen sentiment swing so fast. going from euphoria at the end of january, 12% correction, people on tv talking about this is 2008 all over again i think a lot of the bullish sentiment has been wrung out of the market i don't think we pull back here much from. >> you have to have people telling you it's not 10%, it's

going to be 20%, then you stay out, it's back down 2, and you didn't buy the market is diabolical in the way it tries to -- all these head fakes with people i don't know how it does it. >> you will have a lot of churning through as a result looking ahead, there's not the kind of big news that we saw over the past month. so i think the market will turn around for a while for those reasons. i'm not worried about how far down it will go. jeff is right about that i think it will be interesting to see whether the market can push through the previous highs. that's the more interesting question we'll look at what the fed says today. it won't be interesting. we know they'll take a slightly hawkish tone what about what happens in march when chairman powell's first meeting takes place and they should hike a quarter point what will they say with that? what will we see with first quarter earnings after digesting the impact of the tax cuts

that's when things get interesting. at that point we can look and say hey, we have another year of double digit earnings growth ahead of us. stocks are no longer expensive we're okay for a while it will be a churn through there. >> if you were to look at the positive things in the market, you look at corporate earnings, you look at consumer, business confidence, you look at gdp doing better than the last few years, you look at all these things, it's easy to be bullish. when you get a selloff of 10%, 12%, you wonder whether you're missing something. can i count on my analysis of the fundamental backdrop can i count on that being accurate that nothing is wrong what worries me is we assume that the fed is able to -- all these extraordinary actions that it took and stayed, my big worry

is somehow that's where the bubble is. maybe they have trouble extricating themselves could that be a major problem for the stock market or you don't think so >> i don't think so. i think rates will inch higher michael is right you'll get a 25 increase in march. four increases this year are baked into the markets his point about earnings is spot on isi came out a week ago with $170 in earnings for 2019. i don't think that's fully discounted in the equity markets. >> so you done think central bankers around the world have inflated the biggest bubble that we've ever seen in this case it's bonds and that's going to pop some day and we'll lose control of how we manage these slowly rising interest rates that won't be it we'll be okay? >> i think that the central banks are figuring out on the fly how to gradually let some of the air out. come on, we've had a 50 basis point increase in the ten-year

in six weeks, the world didn't freak out about it >> it kind of did. we had went from 2.5 to 2.8, the market lost 12%. what if we go up 3 points. >> and they gained it right back the key thing also that we have not talked about is the spreads. what about corporate bonds, they're trading so tight to the government to me that tells us the bond market is not worried about corporate profits. the overall level of interest rates will creep up. that gives the fed room to raise interest rates gradually we have less risk of recession i think a steeper yield curve is not a problem. that's a good thing. >> jeff, last question either one of you, so inflation is not all of a sudden going to just accelerate. like we saw a couple of scary numbers, that's what people were worried about. if inflation were to accelerate

quickly and these guys realize we don't need four hikes, we knig need eight or ten, you don't think that will do it? >> if you raise rates eight, ten times, that would put a damper on the equity -- >> that would put us back to 4%. >> it's not going to happen. there's no sense of inflation like that. it's not there >> i agree >> i think this may have been -- >> maybe the "wall street journal" was right to put it on the front page >> do you think this is the best interview i've conducted i think when we get done today, i want to talk about this interview. did you listen >> so far so good. >> really, really -- thank you thank you. are you taking notes did you write down some of my questions? thanks, gentlemen. thank you, michael

>> you bet >> thank you, jeff >> i'll critique you after the show >> do you think you can have anoth another -- >> get your game on. right now we'll get back to the winter olympics in south korea. andrew is there. andrew, last night some amazing action and disappointment after disappointment for us. i was watching this stuff live and tearing up at times. what does it feel like there >> it is -- in terms of where we are on the leaderboard, which we'll get to in a moment, it is not great. there was just a big win, which we'll tell you about, which puts us back in the top five. maybe there's something to be happy about on that end. we do want to start this morning with big political news that's emerged about the vice president's trip here last week. that made a lot of news. we saw lets of pictures of it. pence had secretly agreed to a meet 1/4 north koring with nort

officials while he was here to have that meeting canceled by the nxz north koreans two hours before it was set to begin it would have been the first contact between the countries in years and comes amid heightened tensions just days ago, secretary tillerson was on 60 minutes, he said he was open to communicating with the north koreans and was waiting to hear from them. now in retrospect, that may have been as a result of this meeting that went wrong. pence's spokesman blamed north korea saying the north koreans expressed dissatisfaction of pence's announcement of new sanctions and his meeting with north korean defectors don't know if we can get that picture back up on the screen. pence stanning there, a innin n,

kim jong-un's sister also right there. the meeting was scheduled for the next day the question is whether they knew at that point maybe this meeting was going to go wrong. a lot of people will be parsing and trying to understand what that means in terms of north korea's relationship with the u.s., and of course here in south korea, what that relationship will look like. now let's talk olympics. just before as i mentioned, we had a tough night last night i went going to show you the screen we will show you the medal count. the u.s. was not on that screen. we now are on the screen randall and diggins won first u.s. gold in cross country it was extraordinary it was a nail biter. i promise you, when you see it, i know it will air on nbc soon, it's just something to behold. in terms of where the medal

count stands now, norway has been on the top virtually from the beginning. germany, canada and we're in the top five we've been back an forth with france there we are for now we'll bring you a lot more highlights and a lot more video and perhaps even a couple interesting interviews with athletes in just a while as well >> we have to practice our skating, i think, andrew the u.s. -- i saw a horrible stat that norway, they're winning one medal for every 200,000 people in the country. we're winning 1 medal for every 35 million people. >> we will talk about our hockey team i don't know if you got a chance to see, carl and i were out on the ice. >> that's where i thought you guys needed to practice. that was a good illustration of it remember when we were on hockey -- we did that for the one olympics >> yes >> i should not be talking about other people practicing skating.

that's not our thing necessarily. speed skating. >> look, there's a couple other big events coming up throughout the week hopefully we'll have a good chance of bringing home medals we'll show you some of that in a bit. >> cheer louder or something over there are you cheering >> the difference in between winning some of these things and not is 0.4 seconds you went like this instead of this >> that's not true >> the slip in the beginning it's years of work that goes down the drain i cry for these athletes >> everybody is facing the same rules. >> i'm rooting for the home team >> there's a lot of tearing going on here. by the way, in terms of -- i don't know if you can see what's going on we have people behind us they just crossed the million person mark in terms of people who have come to visit the games. so there are a lot of people

cheering a lot of cheering for a lot of sports i think curling may still be going on right now across the way. we'll bring you that >> is it -- you're 14 hours ahead of us? it's 8:20 there? >> right now, yes, 8:19. andrew, thank you. we'll check in with you again in a bit. we have more of the biggest movers we have your list of stocks to watch after the break. and we have new data on how the me too movement is affecting small businesses across the country. "squawk box" will be right back. so you're looking for male customers, ages 25-54,

who live within five miles of your business? like these two... and that guy. or maybe you want to reach women, ages 18 to 34, who are interested in fitness... namaste. whichever audience you're looking for, we'll find them we're the finders. we work here at comcast spotlight, and we have the best tools for getting your advertising message out there. anywhere, any way your audience watches. consider them found.

welcome back to "squawk box. it's time for closing the gap, a new area of coverage that will face women in the workplace, everything from inequality in pay to the gaps in leadership and corporate culture. today's topic how the me too movement has impacted small businesses kate rogers joins us with the results of a new survey. >> cnbc and survey monkey are looking at harassment policies nationwide and what we found are

interesting. of all of the businesses that we polled here, the split is nearly even with 50% saying they have an official policy in place, but the smallest business owners, who make up the majority of businesses in the country, they were much less likely to have a policy only 39% of those with 0 to 4 employees have a policy in place compared to 85% of those with 50 or more workers. what's more, at the country's smallest businesses, 68% say the business owner is often handling the harassment claims. 68% of business owners said they were the ones to handle those claims, 3% said those claims are handled by human resources, 10% said there's no specific way to handle harassment claims in the workplace. larger companies, 15% of owners said claims are handled by the owner. 62% said they're sent to human resources. also in the wake of me too, 11% of all small businesses said they issued company-wide communications to remind workers of sexual harassment policies and reporting procedures 9% of them have reviewed policies regarding diversity and gender equality and 7% required new training more important, 5% have fired or

suspended employees over misconduct back over to you >> kate, you hear these things, you think okay, there's not an hr department probably in many of the places. if you have 0 to 4 employees, one will not be in charge of hr. then you realize in big businesses where all of these policies and programs are set up, you get numbers like this on the head of "usa today" where they say 94% of hollywood's women say they have been sexually harassed or mistreated at some point. it's not like the policies and procedures necessarily protect the people who are there in big business >> that's the point of this series we want to call attention to these issues, we're at a flash point where we're all talking about it we want to point to businesses using creative solutions, doing things right and get more women in business and feeling comfortable in the workplace >> and even having conversations like this, just heightened awareness of the issue, that's probably a big first step. >> we certainly hope so. >> kate, thank you very much coming up, at one point we

heard that president trump is considering a gas tax. they pulled that back. i don't know where we stand now, but it would pay for the big infrastructure plan. now a powerful conservative group led by the koch brothers is leading a fight against the increase, the first since bill clinton. 1993 we will talk about it with ray lahood as we head to break. here's yesterday's s&p 500 winners and losers obvious. sometimes, they just drop in. cme group can help you navigate risks

and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group - how the world advances. ♪ imagine if the things you bought every day... earned you miles to get to the places you really want to go. with the united mileageplus explorer card, you'll get a free checked bag. two united club passes. priority boarding. and earn fifty thousand bonus miles after you spend three thousand dollars on purchases in the first three months from account opening plus, zero-dollar intro annual fee for the first year, then ninety-five dollars. learn more at theexplorercard.com

i thwell wait. what did you meetthink about her? it's definitely a new idea, but there's no business track record. well, have you seen her work? no. is it good? good? at cognizant, we're helping today's leading banks make better lending decisions

with new sources of data- so, multiply that by her followers, speaking engagements, work experience... credit history. that more accurately assess a business' chances of success. this is a good investment. she's a good investment. get ready, because we're helping leading companies see it- and see it through-with digital.

♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. welcome back time for the squawk planner. january existing home sales are out at 10:00 a.m. eastern following by the minutes from last month's fed meeting at 2:00 p.m. patrick harker speaks before the opening bell minneapolis fed president neel kashkari speaks later tonight. delphi and wendy's report before the open cheesecake factory, pandora and roku out after the close

futures indicated down about 53 or so today. i think the nasdaq was okay yesterday. >> it was down, but just barely. >> up today. diverging from the s&p and the -- >> walmart was the big issue weighing on the dow. it was responsible for 73 points in the pullback. let's talk about the trump administration considering a federal gas tax hike that is getting big reaction joining us now is former transportation secretary ray lahood thank you for being here >> thank you >> gas tax has been something we've been talking about for a long time. it hasn't changed on the federal level since when >> 1993, during the clinton administration it is the only thing in 25 years that hasn't gone up. it should. it we want to get a big pot of money, if we want to fix roads, if we want to fix our 60,000 bridges, we need a big pot of money.

public/private partnerships are fine, but we need to have the ability to raise the kind of money to fix these bridges 25 states in the last three years have raised their own gas tax. that's because they're not waiting for washington, and not one politician has been thrown out of office. of these 25 states, most of them are republican, controlled by republican governors, republican legislators, nobody got thrown out of office as a result. why? people get it. when you invest in infrastructure, you invest in people, in engineers, people who fix the bridges. the money goes back to the american people. >> there's a big push back now i'm not sure this will get the legislative heft that you might require on capitol hill from this already pushback coming from the senate whip saying he doesn't think you should have a gas tax hike and now a new study funded by the koch brothers who says

this will be a big taxand this will take back all the money that the tax cuts have given to these people >> i say baloney i say if you're going to have good infrastructure, create economic corridors, have the kinds of roads and bridges that made america the country where people wanted to invest. you go to china or asia, go to europe what do they have good infrastructure. new roads, new bridges, new trains what do we have here 25-year-old transit temperatusy falling apart, roads falling apart. people don't want to invest if you don't have the infrastructure you have to have the roads and bridges. the people that build it are american workers >> you're a 10 cent guy, trump is a 25 cent guy >> i'm with trump on this one. i think if he continues this drum beat, we have a shot at

raising the gas tax. >> we have you on tape saying that say it again, i'm for trump -- >> for the gas tax >> you're still a democrat, right? >> i'm a republican. always been a republican >> no wonder that makes sense >> 14 years a republican -- >> if you're a democrat, you're prohibited from saying anything positive i'm a republican, life long, always have been i wouldn't have gotten my job in the obama administration if i wasn't a republican. >> it would have been nice if you told me this a while ago >> if you get this leadership from the white house, the president will push the congress to raising the gas tax >> where do you think he stands now? he says that, and then maybe hears from people in his base. what do you think he's doing >> i think he's listening to the

chamber of commerce who recommended a 25 cent increase in the gas tax >> that's how he wants to fund the infrastructure >> maybe listening to a few like ray lahood who say if you want a pot of money, if you want to build america, get back to being number one in infrastructure, you have to have a big pot of money. the pot of money that built the interstate system, highway trust fund it's broke >> but what you hear from people on both sides of the aisle is the highway trust fund has been raided for a lot of different projects how do you lock that money up? >> what i say to those people is that's been wrong. in order to assuage them, put it in a lock box. raise the gas tax 25 cents a gallon, put it in a lock box, it only goes for roads and bridges. you work with your governors and mayors to make sure that money is spent on american workers, american engineers, american contractors. it goes back into america.

it doesn't stay in washington. what about the argument that this is a regressive tax >> do you do anything at all to make it less regressive? >> it's a user fee it's a user fee. that's what it is. if you use it for what it's intended, you will put people to work >> the trucking industries have said they're in favor of it. >> i know they have. the largest segment of unemployment in america today is people that build roads and bridges. they need jobs >> there's an offset there for people with a fixed amupt of d amount of disposable income, it affects them more. >> the governor has come out with a plan to take the money that they're going to use for tolls and congestion pricing, and put it back into infrastructure >> so the states can't -- i would think you would be positive about the states that have undertaken it themselves. you think federally it has to be done it's not a state thing

>> of course it does we've always been a nation that's invested in infrastructure, except the last few years. go to nations like china, go to countries in asia, in europe, why do they have the best trains >> no argument from anyone the national government makes the investment the states don't have the money to do it >> even with the president getting behind this, you have a big uphill push in washington. there's plenty of things the president has been behind that have not passed legislatively. what has to happen for this to get passed >> once the president got behind the tax cut, boom, it happened when the president gets behind something -- when the white house gets behind something, it's hard for republicans to tell president trump no. i give him credit on his vision with this. he gets it he made a big pitch during his campaign, we'll fix str infrastructure the only way do it is if you have money

the only way to get the money is raise the gas tax and reinvest it back in america you with me on this? >> it's like a night and day today. what are you doing later can you hang out until 9:00? >> i can hang out as long as you would like me to >> you were in the last administration, right? >> yes >> have you rethought that idea? >> not at all. >> we needed you there >> thank you >> coming up, an olympic update from andrew ross sorkin. he's writing his own copy here, live from south korea. and the spring housing season is kicking off. later southern company posting earnings we will talk to the ceo, tom fanning. stay tuned, you're watching "squawk box" on cnbc where eryve interview is great

we've been preparing for this day. over the years, paul and i have met regularly with our ameriprise advisor. we plan for everything from retirement to college savings. giving us the ability to add on for an important member of our family. welcome home mom. with the right financial advisor, life can be brilliant. yes or no?gin. do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts?

$1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left. let's do some card twirling twirling cards e*trade. the original place to invest online.

. welcome back we've been watching the u.s. equity futures, and so far it's a mixed picture. the dow down close to 60 points. the s&p futures down 6 points. the s&p was down yesterday as well as the nasdaq this morning the nasdaq is in positive territory, indicated up by 2.5 points. if we were to stay at these levels at the open -- not the most likely of scenarios because of a lot of news coming up, we have earnings and the fomc minutes. the market will digest all of that throughout the session. let's look at what's happening in the currency markets. right now the dollar is up across the board 1.2316 for the euro. the yen at 107.43. the price of bitcoin, which has been skyrocketing again, hitting new highs yesterday. right now at $11,050 at least on

one of the areas that it's been traded >> let's get back now to andrew ross sorkin at the winter olympics in south korea. you heard that, back over 11,000 on your bitcoin. >> i saw that. i saw that we'll show you by the way an interesting article in one of the local papers here about that regulator, the top regulator from south korea who was found dead just over the weekend he regulated cryptocurrencies. we'll show you that in the 7:00 or 8:00 hour in the meantime, i promised results. tough day for the men's u.s. hockey team. eliminated in the quarter time round by the czech republic after a 2-2 tie at the end of regulation then the game came down to a shootout the u.s. team could not get it done the czech republic won 3-2 an are headed to the semifinals hopefully the u.s. women can redeem the men tomorrow when they play canada in the gold medal games.

while we've been paying attention to this, we've been paying attention to athletes who have won medals and what happens after their olympic career ends. we caught up with 2006 figure skater silver medalist, sasha koe whcohen and asked how she pd her second career. she watches cnbc and works on wall street now. >> i always had an interest finance. when i was competing, i watched cnbc, i took up an interest in gold at the age of 15 and wondered why there was such wild fluctuations it's always been something i've been interested in, understanding investing, a big fan of warren buffett. >> do you follow warren buffett now? >> i do. i think i may go to warren buffett's buffett day. >> we'll be there. in omaha >> it's a date

>> any other business heroes for you? >> so many, but i think more on the entrepreneurial side elon musk. just people that can be visionaries, see beyond the next quarter. kind of what they're trying to create in this world definitely people like bezos and musk >> cohen is also working on a documentary about making the transition from sports to a civilian career. you can find more of our conversation with her later on she's now working at morgan stanley. >> in new york >> in new york in new york. >> that's really cool. we have to get her to come in here >> we actually found a flub of athletes who found their way into finance or who are entrepreneurs and plan to go into business. we talk about the american dream you all the time this is the american dream at large. sfrnl >> is there a parallel between

sports and wall street or finance? >> it's actually interesting we asked that question a lot in terms of what it takes to do what they're doing in sports and the logic train of how they're thinking about what they're currently in or want to go in. i think in all of these instances, it's pressure they figured out how to work under immense pressure and i think we all can acknowledge that sometimes wall street can sh a bit ofbe a bit pressure cooker. >> you think about athletes in professional sports. they usually make a lot of money during their career that can happen to an olympic athletes with endorsements, but not necessarily. only the top tier do that. all these people who devote so much to their sport without the monetary compensation from professional basketball or football or baseball, they need to come up with something after. >> no question

most of these athletes do think about a second career. virtually every one of them. so many of them ask me questions about something in business or where they could go next things like that >> that's scary. >> it's worth noting that the winter olympics not as lucrative as the summer olympics tratitiontratitio traditionally. and also the cost of participating in the winter olympics so many of these sports are either on skates or on skis, it can become a very expensive project that has to be much more than a hobby for so many of these athletes >> will you go up on that -- you know where they did the big air on the snowboarding? it's like ten stories high >> we were over there. >> did you go up >> we're over there today. >> i want you to go up with a

camera and look -- when they -- i see them looking down. i couldn't get out of the elevator, i don't think up there much. >> they're going to be jumping tomorrow so we'll try to go up there. >> will you go up? >> we have some tape we'll show you tomorrow >> will you go up? >> we'll try to up there >> try to slide down on your butt, try it that way. see what it's like what i do have for you guys later, not today, but i think tomorrow, i hung out with a biathlete. so i went skiing and shooting. >> that's cool >> we did a bit of that today. we'll show you i didn't fall. that was -- >> that's neat, too. >> well done >> i was watching one of the biathletes -- on the last target, they froze have you seen that it's so important they get the last one, so they don't get a penalty lap, and they couldn't pull the trigger

they finally did, missed so much pressure you know, if you're shaking while you're trying to hit that -- >> and you're cold >> andrew, use one of those saucers. get one of those saucers, those aluminum -- go down that thing we'll get a camera. >> a little sled how much hair wouair would you there? we'll figure out a why i don't know if we'll get on that thing, we'll figure out how. >> see you in the next hour. >> by the way, andrew and sasha cohen both mentioned warren buffett. we'll talk to the oracle of omaha on monday. as can send your questionto ust squawk cnbc on twitter and on our facebook page

.

facebook is wrestling with critics over a wide range of issues including the russia scandal. one of the company's original architects, co-founder chris hughes spoke to us yesterday about facebook's obligations >> facebook has a responsibility, not only to ensure that we are seeing content from friends and family that we might disagree with, but to make sure that foreign powers are not hacking our election

>> and joining us now for more, frank fore, he is a correspondent for "the atlantic," author of "world without minute, the existential tech threat. thanks for joining us. >> thank you. >> have you ever heard of alexander and the terrible, horrible, very bad day it's sort of a metaphor. it's zuk and the terrible, horrible, very bad, no good year i just checked the market cap, 421 billion. that's like two boeings still for what -- >> yeah. >> so it's been awful, but i haven't seen anything in the stock yet. >> no, you're making a good point, which is we have this backlash it's come at facebook fast and furiously and it's happened on capitol hill, it's happened on the media but it really hasn't -- and we've seen some evidence that the public's trust in facebook has shrunk yet still

when it comes to regulation there's really no big looming threat there yet there's no piece of legislation that facebook sits back and says, we're scared of. there's no regulatory action that they sit back and say that we're scared of right now, at least in the united states, and it still remains its position where it rakes in money from its dominating position in the advertising market >> yeah. i mean, you follow the money, frank, really, and the people that have big money and that are doing things, if they're not telling me that there's a real problem here, i find it hard to believe that there really is how would we know when it starts really becoming a problem? what would that look like? >> well, you know, this is the way the backlashes begin, right? oftentimes is that it starts off at an elite level. it has some potential for trickling down to the public i think it's become a partisan issue because of the russia investigation. you have a lot of democrats who

are fuming mad there is conservative animus towards elites you have steve bannon, fox news going after facebook i think quite often for reasons that are a little bit familiar where they view them as kind of a mouth piece for a certain sort of liberal bias, but there are also these threats that are looming where you have the europeans enacting their new privacy regime later this year which have some potential for spreading over here and i to think represents a threat to the fundamental thing that facebook trades in, which is your data. >> you've got to come in studio and -- just because, i mean, there's a target on the back of the whole valley out there. >> oh, totally. >> i wonder whether really -- and the market cap, you add it up and it's huge come in and let's find out more about this we've spent a lot of time on the olympics i'd like to see you in here and talk more about it. >> pleasure. >> okay. thanks. when we come back, we're

going to talk market strategy after yesterday's 1% loss for the dow. stick around 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. big thinking in the finger lakes 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

the dow snapping a five-day winning streak earnings and fed minutes likely to drive today's trading session. we'll get you up to speed on what you need to watch. amazon looking to disrupt the over the counter market and the move could hit pharmacy stocks we have the details straight ahead. plus southern company's big bet on nuclear and coal. ceo tom fanny will join us to

discuss the president's energy plan and the company's latest results as the second hour of "squawk box" begins right now. ♪ ♪ live from the beating heart of business, new york city this is "squawk box. ♪ ♪ good morning and 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 is in pyeongchang covering the olympics and we will hear from him in a bit. good morning, andrew, good evening, whatever it is there. >> we're going to check out the u.s. equities markets. the red arrows continue at least for the dow and the s&p 500. right now the dow is indicated down by close to 40 points s&p indicated down by 3 points and the nasdaq is up by 15 points it was the best performer yesterday, too, down marginally at the close

in our headlines this morning, what may be the most important event today for the markets won't occur until 2:00 p.m. eastern time that's when the federal reserve is going to be releasing the minutes of its most recent meeting. investors will be looking for more clarity on the future path of interest rate interests, maybe see how many times they expect to be raising rates this year, at least what the chatter was around the table higher interest rates could be a factor in today's interest rate data, too. the national association of realtors releases interest rates. congress has been looking for an increase of .7 of a percent. we'll have more on the housing market with diana olick. apple's next big purchase may be cobalt directly reports say apple is in touch to buy cobalt directly from miners for the batteries. the batteries use lithium ion. joe. >> looking that up because

they're different. >> cobalt? >> cobalt and lithium i guess are used together. >> are used in the lithium ion. >> the cobalt, yeah. lithium cobalt oxide maybe is what it is so you've got to -- yeah, you need -- >> one of the two and it makes -- >> lico o2. >> rare material we are using at a pretty rapid clip. >> read about this right now it's got a very cool structure. >> after this. >> few stocks on the move. we've got to get to floor. floor's fourth quarter stock following. adjusted profit and revenue beat forecasts on the energy chemical and mining lazy boy posing a drop when you hear that don't you think it's got to be related to taxes. you don't sell 48% of those. people buy those consistently.

may not be a great growth industry. >> was at the super bowl and the olympics. >> exactly. >> you could still see big sales. >> they still make the kind with the refrigerator in the arm of the chair. >> the kegorator >> yeah, for the grape soda. settlement over the royalty payments let's go check on the markets at this hour as we told you, looks like the futures are mixed right now. joining us to talk about what to expect, what direction from equities and the bond market is matthew diezock. he's the head of fixed income strategy also covering the equity angle, we've got ed campbell. gentlemen, thank you for being here, both of you. i want to talk about these kind of countervailing opinions that are taking place on the street you have companies like goldman sax and morgan stanley saying you could be hitting a peak. morgan stanley is looking for

2750 and that's just before where we are and you have blackrock coming out saying, no, we're doubling down. what we're seeing in earnings is really important and we like it more than ever where do you kind of come down >> i guess we would lean towards the latter view. i think the 10% correction that we had has taken out a lot of the froth that we had built up we're in january based on very strong fundamentals, low volatility and one way upward price interaction we had gotten too exuberant. we had gone a long time without a 10% pull back. >> we've kind of made back more than half of those losses we've made back up. >> true. >> do you like stock prices here >> i think bottoming is typically a process. it would be pretty unusual if we had this 10% correction, we got it all back in a couple of weeks and then we were off to the races again. so i don't think it's unusual to see equity markets down again. i think we might have to move a little bit lower and consolidate for a while before we shake this off.

>> would you be telling people to buy right here or would you be saying, wait, if we're still looking at a shaking out process? >> we've been buying because we don't think we can time this too perfectly. >> you're fine with valuations here based on what's been happening? >> yeah. valuations have come back into a more reasonable range where they were definitely getting ahead of themselves in january. >> matthew, let's talk a little bit about fixed income because joe pointed it out this morning. front page of the wall street journal points out that bond yields near 3% and that's potentially a turning point for investors. do you think that's the case 3% do you suddenly look at bonds and say, okay, this is the place to be. >> we don't think it's a magic number we think it's fantastic that they've gotten to 3% we're very positive on higher rates. we think a lot of the move has been baked in already. a lot of it has to do with not just what's happening in the u.s. but what's happening globally if you look at german rates, basically a one for one move with u.s. rates. >> what are we talking about

now, 70 to 80 basis points >> about 70 basis points in german bonds the spread between that moves almost one for one we talked about this last time i was here, in order for u.s. rates to move up you need to see a rise in global rates we're starting to see it if that continues you can see us push past 3% which will be wonderful for savers looking for additional yield. >> you say that these rate hikes that we expected to see are already baked in are you expecting three rate hikes? >> the markets start thinking two and they move to three and talking possibly about four. still in the camp of three, four is a possibility we're thinking it's going to be three. we think a lot of the move in treasury has been front loaded very quick move up to almost 3%. probably going to stabilize for a while. to ed's point, we think the equity market is going to be a process. this might retest the loads. that should keep us in the range of treasuries for a little while

here. >> what are the risks i would say if you start looking at equities here? the risks that something else shows up what do you think caused this pull back to begin with? do you think it was a little too much too fast? >> i think what caused the pull back was the rapid repricing in fixed income assets and the facts that we were over frothy in equities. that being said, i don't think rising rates are going to be a big obstacle for equity markets. our research shows that equity multiples and equity returns do better at a normal interest rate regime than in an ultra low interest rate regime in an ultra low that's signaling deflation risks and a sick economy. so normal is better for equity. >> do you agree with matt that we have seen kind of the shakeout in yields at this point? >> i think yields could possibly go higher but i think the majority of the move has already been put in. >> is there a point where you would say wait a second, this doesn't look like the same valuations i would expect because we are seeing so much

more yield in bond market? >> i mean, if you -- >> is 3% a tipping point >> no, i think we need to go past 3.5 at some point where i would be really concerned about the impact of rates on the equity markets. >> what do you like right now? would you tell people to buy broadly? do you like u.s. stocks versus european >> yeah, we would say buy broadly. i think european and japanese stocks have better valuations but u.s. is going to have better earnings growth so i would be buying broadly within equities we're focused on areas like financials and energy. >> late cycle? >> yeah. >> thank you very much for coming in. >> thank you very much good to be here. >> mortgage applications out just minutes ago diana olick joins us with more hi, diana. >> hi, joe look, i know i sound like a broken record but mortgage rates are even higher and applications for mortgages are even lower take a look. new numbers out moments ago show the average rate on the 30 year

fixed hit 4.64 up from 4.57. that is the highest level since january of 2014. the numbers are getting uglier for both potential home buyers and homeowners looking to save some money total mortgage application volume dropped 6.6%, that according to the mortgage bankers association. up 3.5% from a year ago. rephis always take rates the hardest. those applications down 7% for the week barely 2% higher than a year ago. mortgage apps to buy a home down 6% for the week and 3% higher than a year ago. we're now getting into the spring home buying season. affordability is weakening further as home prices continue to rise due to the still very low supply of homes for sale now mortgage rates are more than half a percentage rate -- percentage higher than they were at the start of the year and they moved up again yesterday and we all know what's coming this afternoon with the fed.

joe? >> okay. yeah, we do, diana we'll be watching for that diana, it's the lithium cobalt oxide. it's actually used in the positive electrode of the lithium ion battery and it turns out that both lithium and cobalt are octahedrally coordinated by the oxygen molecule. you have the slabs with the lithium in between you have cobalt, oxygen, these slabs and then the lithium did you know that, diana, or are you focused on mortgages >> i was actually, you know, focusing a little bit more on the housing market, mortgages, existing home sales. >> complicated you see those commercials -- >> i see those more complicated than the lithium batteries. >> i'm with you. that's why we have you and it's early. >> i'll explain that and you stick to the battery. >> we didn't know about the cobalt with the lithium, but it's -- i wonder what is the

negative annode consist of i wonder >> i don't know. you can find out. >> this is the positive one. they are -- you have to worry about charging them too much because -- >> they could blow. >> yes. >> that's why they can't go on planes. >> yes yes. >> coming up, an update from pyeongchang and the olympics we'll check in with andrew after the break, and then energy in america. i bet you this guy likes fancy stuff. om fnithasanng joins us to discuss the southern company state. you know what's awesome? gig-speed internet.

you know what's not awesome? when only certain people can get it. let's fix that. let's give this guy gig- really? and these kids, and these guys, him, ah. oh hello. that lady, these houses! yes, yes and yes. and don't forget about them.

uh huh, sure. still yes! xfinity delivers gig speed to more homes than anyone. now you can get it, too. welcome to the party. welcome back to "squawk box," everybody. let's get back to andrew he's in pyeongchang covering the olympics andrew, what can you tell us right now? >> reporter: little bit of sports to get you updated what's going on here today. lindsey vonn taking bronze in the women's downhill alpine event in what is likely her final olympic run. she's now the oldest female medalist at alpine skiing at age 33 she won downhill gold, of course, at the 2010 vancouver olympics but sat out of sochi due to that torn acl said she dedicated this performance to her late grandfather. here's what she said about her bronze medal >> i'm not disappointed.

i have a medal you know, i gave it everything i have i have worked so hard, especially, you know, the last eight years with all my injuries it's been a tough road but i'm back on the podium and that's what counts. >> reporter: earlier today she tweeted that her bronze medal felt like gold and vonn races again tomorrow in the lady's alpine slalom. she has given over her body over the last decade to skiing and of course between the torn acl and the back injury, it has been a tough road for her but that bronze looking like gold for her today. in the meantime, want to get you caught up on the medal board so far behind norway >> we're going to have to keep our eyes on that there are a couple coming up that the u.s. has been

traditionally strong in so we can keep our fingers crossed, guys. >> yes, andrew as you can imagine, we've been busy working on some things. once we thought about you going down that thing in the -- you know, in one of the -- what are they called, saucers or something -- >> yeah. >> they came up with that, which you look -- i think the expression on your -- did you see the expression >> i'm looking at it right now i'm looking at it right now. by the way -- yeah, go ahead >> chevy chase. >> yes i think that's the chevy chase will they let you up there, do you know >> i was envisioning. >> this is probably -- this is probably the best video we're going to get because i should tell you that, you know, in between the last time i saw you i did a little bit of homework i was talking to some of the producers. they don't let, you know, us citizens, if you will -- >> mortals.

>> mortals up there. >> i can't say i'm surprised by that. >> we're still going to try, but i think this video is probably a good example of what it would look like. so you can sort of picture it in your mind. >> all right >> we thought of -- you know, we're thinking about interesting things -- >> we actually have some other video. it's not like this, but it's close. you'll -- there will be some chuckling and it will probably be at my expense. >> no, no, this is not at your expense at all this is an excuse to run one of the funniest -- when he gets done with this -- >> somebody pointed out. a careful viewer said the parking lot he lands in is the dow's biggest decliner you can tie this back to business news. >> sometime off camera we have to talk lithium ion batteries. i know you know about those things >> yes. >> did you know they were cobalt >> yes. >> they're hard to harness this -- >> yeah. >> they're scary but totally necessary. we can't do anything we do

without these things they charge. >> fascinating if apple is doing this deal, it's unbelievable. very interesting way to use their money, right >> mine it directly and make the lithium cobalt oxide anyway, coming up -- i asked diana olick about it and she -- i think she's like, what is wrong with him i think, maybe. >> she may not be the only person thinking that. >> yeah, yeah, right the 91-year-old monarch making her runway debut sitting next to the devil wears prada. that's photo shopped, got to be. the queen making her way to the runway southern company ceo tom fanning. the company's bet on nuclear and cobalt

experand the nx hybrid... nx, with a class leading 31 mpg combined estimate. take advantage of special president's day offers now through the 28th, on the 2018 nx 300. experience amazing at your lexus dealer.

yourbut as you get older,thing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

♪ ♪ the first time ever queen elizabeth made an appearance at london fashion week. the queen sat in the front row, got good seats good tickets british designer richard quinn's

show next to "vogue" editor in chief anna winter. the monarch's arrival surprised the crowd at london fashion week as she attended to present quinn with the inaugural queen elizabeth ii award for british design i don't know, i mean, in terms of being star struck, that might do it. >> yeah. >> although after seeing some episodes of the crown i feel like i know her a little bit. >> it's funny, i do, too i feel like i love her a little bit more. >> the human side of it. >> yeah. >> exactly that would still be -- i know i'd do something wrong. >> there's a lot of protocol don't turn your back to her. make sure you call her the right thing. you don't want to do what jackie o did. >> right no >> stumble through i might bone up on that -- >> keep my distance would be the best. >> can't disagree with you all right. university researchers are warning that the malicious use of artificial intelligence could

turn drones and self-driving cars into weapons. this report comes from universities such as oxford, cambridge and yale released today. we're using the rise of the machines but that's not what this is about. this report says the hackers could use drones for surveillance humans could be doing things to launch quick, coordinated attacks. >> for now. >> they could be tricked into misinterpreting road signals to cause accidents. the report warns that artificial intelligence could be used to create highly realistic videos of state leaders making -- >> there's so many ways to comment on that. >> exactly yeah >> is that what's been happening? >> yeah. it's max hedrom's been talking all this time. >> when we come back southern company making some big bets on coal and nuclear power under the trump administration ceo tom fanning is going to join us right after the break to talk about all of this.

as we head to the break, take a look at the u.s. equity futures. p wndown by 30 points. s&do by 2 and nasdaq up by almost 20.

♪ ♪ ♪ good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. let's talk about the stories that are front and center this morning. dow component 3m has settled a water pollution lawsuit with the state of minnesota 3m has agreed to pay $850 million foreground water projects the state had sued alleging that 3m had dumped millions of pounds of chemicals for decades they posed they were no problems it's been a settlement that has been a long time in coming -- in the making. also, the white house is considering financial relief for those weighed down by student

debt right now a long standing law doesn't allow people to get rid of the financial debt unless they can prove hardship. the focus is on food and beverage in today's after the bell earnings report investors will get the latest quarterly reports from boston beer, cheesecake factory and jack in the box. jpmorgan is now planning to build a new 2.5 million square foot headquarters at its 270 park avenue location here in new york company is consolidating its global headquarters from a variety of locations the new building would house about 15,000 employees and replacing an outdated facility designed in the 1950s for about 3500 employees i need to know more. what about the building that's there? does it come down? do they redo it? how does that -- >> it's at the same address. >> that's what i mean. >> dothey take it -- >> i don't know.

let me look at it. >> see, dom, this is -- i want to assign it to dom. i assign dom all kinds of stuff. can you look into that, dom? >> i'm going to look into it that 270 park avenue building is fairly iconic. back when i used to be on wall street i used to work for a company called ubs and they're across the street at 299 park avenue. >> they're probably going to face lift and redo the whole interior or something? >> it would be weird to see them -- i don't think you can implode a skyscraper building. >> this says it will demolish its headquarters and build ane 70 story world headquarters. >> wow okay there you go >> the building will be the first skyscraper to go up in new zoning rules around grand central terminal. >> you know, dom, in a ground breaking interview i conducted earlier, i tried to figure out the technical levels for what happened yesterday and whether we go back to down 12% or

whether we retrace half of the initial. do you have any technical levels that we need to look at on the dow or the s&p that can give us some insight into this maybe some moving averages >> there are moving averages i mean, obviously when we talk about moving averages in the charts and technicals and everything out there, it's tough to kind of say whether or not one factor, one number, one level in a chart is going to be the place where a lot of things happen, but it's something that some traders do watch. i would say that yesterday we were watching 2727 in the s&p 500. we kind of battled around there for a bit. we used that as maybe an area of resistance it's a simplistic way to look at it traders and investors use a lot of these levels to kind of gauge where they want to take positions, either get out of them or get into them. as you take a look at where the markets stood, as they ran into resistance, we found some parts of the market that are finding resistance levels of their own there are three places in the s&p 500 that are 10% below or more from their recent 52 week high

something some traders call correction levels, some people just say that they're 10% pull backs. nonetheless, if you take a look at real estate, real estate is now down 10% from its recent highs. we'll call it maybe correction for some folks out there, some people would just say a 10% drop utilities are 13% below the recent highs energy continues to be a battleground the bulls and bears battling out whether the future of oil prices will be to the up side if they're down 13% overall. if you take a look at other parts of the market that are at or near the 10% pull back levels, the nikkei is off 9% given the trading action we've seen the dow transportation stocks, the average off 9% as well sse composite, china off 10% ibex in spain off 11%. dow jones average off 13%. the shenzhen off 15% the dax is getting back towards that 10% pull back zone. we're not there just yet still some places in the market

to watch if you're looking for signs of stress in the overall scheme of things but i would watch maybe some of those levels in the s&p like 2727 we'll see if that ends up being an area of resistance in today's trading. back to you. >> dom, thanks those are the questions i had, now they're answered. >> you know, 270 park with jpmorgan. >> yeah. >> they've got 6,000 people crammed into a building originally designed for 3500 that's why they're doing this. they've rented space around all the buildings. >> that's like a prison. employees feel that way, i think. >> they're going to build this new one different. >> 70 stories. >> ten years >> five years. they're going to start demolishing next year. >> would have taken ten before with the permits maybe faster this is crazy. fanning, i've got some things to ask you. southern company beating beats on top and bottom lines with the latest earnings report joining us now, the chairman, president, ceo of southern company, tom fanning

frequent guest and guest host. so you finally got your tax reform that you've been just -- i mean, just talking about for years now. >> hey, joe, you heard it here first, man. >> was it everything you hoped it would be? what will it do for southern company and customers? >> hey, look, it's a great thing for our company, our customers, the industry, america. we've been calling this for so long you know, in effect, joe, what this is going to do i think is sustain this kind of improving market and improving economy that we've had now for some time the electric utility industry is a wee bit different than the rest of america. not to get geeky, but back in 1986 we had tepra. there was a carve out for electric property utility. we had that same sort of carve out. in effect, we were able to retain interest deductibility. we did give up some cash flow. we don't expense capex but we

did benefit from a lower tax rate the net effect of that, now i'm speaking very broadly, every company is going to be a wee bit different, but we will be able to reduce rates, we believe, in about the 5 to 7% range and do the things necessary to restore our financial integrity, our credit metrics. >> your stock doesn't have a huge range, but it is near the lows a lot of it has to do with these two projects that are seemed to be suffering from some delays and some cost overruns could you go into that what two are they? and is that something that takes up a lot of your time trying to figure out how to get these things done? >> well, sure. >> yeah. >> yeah. one project, it's really one project now, it's our nuclear project going forward. first of all, our stock has declined, but along with the industry just because of rising interest rates. >> yeah. >> we have a dividend yield of

about 5.2% right now so it's -- it looks like an awfully good value in terms of our nuclear plant, the big story last year was toshiba's subsidiary westing house was building our plant for us, westing house declared bankruptcy we had to make a call whether to step in or not, and i will say this administration and congress has been extraordinarily supportive of preserving some of the economics for us to move forward and then the state regulators, state government likewise were supportive number one -- >> is that different -- sorry. is that different than the kemperer project is that the clean coal project that's going to cost twice as much as the budget for it, right? >> that's -- yeah. we wrote off the kemper project last year. we did get approved the electricity side of the kemper project. they were going to be gas si phiing coph

ing -- gassifying coal the nuclear project, joe, had some extraordinary support number one, we removed westing house, general contractor position now it's us and bechtel. number two, we received dollar for dollar a $3.7 billion guarantee from toshiba we had extraordinary support from rick perry, wilbur ross, mike pence and others in the cabinet to help get that done. thirdly, we extended again loan guarantees from the federal government that were put in place to incentivize new nuclea programs and congress put in a new tax bill sure enough, we were able to preserve our production tax credits that likewise were put in place to incentivize companies in america to produce new nuclear. we got those four things done and we're off and running.

early results are encouraging. a long way to go, but productivity on the site is about what we want. >> all right so we've talked a lot in the past you -- i don't understand this keep your friends close. earnest moniz is on your board >> listen -- >> are you allowed to release any ceo without him going like this for you does he know you have some coal operations >> well, look, joe, i've said this before a lot. you know, before i got in this role we produced about 70% of our energy from coal last year 28%. we've really -- >> to be zero. to be zero according to ernest >> well, we're transitioning the fleet in america in fact, we've led the way a long time in researchand development, right but i've known ernie moniz for 15, 20 years we served on a board together.

energy secretary, of course, i've done a lot of work with him in the past. he's just one of the smartest guys i know, and i think when you think about preserving new nuclear, finishing this big project, he'll be extraordinarily helpful. us' alwa he's always been supportive there. when i think of the changing business model with regards to energy, he'll be helpful there we've made some investments. to think about how technology will enable, how customers require, a completely different model. i think ernie will be great help to help us think through those issues. >> with the recent rennaissance with natural gas and horizontal drilling and everything else in this country -- >> you bet. >> -- has lowered the cost of fossil fuel derived energy significantly, and this guy is not a fossil -- he wants fossil fuels to go away >> no, joe let's think about it this way.

there's going to be a natural evolution, and the thing that we can't predict today is how technology will change the landscape of making living and selling energy so i would argue that erni ernie moniz is one of the great thought leaders in america of how new technology will enable us to transition that fleet. of course natural gas is such a positive development for america and, in fact, like i said, in '15 and '16 we made big bets to go long on natural gas, and we have done that >> all right >> but i think there will be technology changes along the way like our power secure investment, like our investments i've been on the show before investing about bloom and everything else. i think there's lots to go i think the big game changer may still be storage. >> so if anything negative happens with any of this construction, is that dividend in your view 100% safe forever, the 5% yield you talked about? >> oh, look, joe

vogel, it's kind of an under told story, but i get it vogel only represents about 6% of our earnings. >> so you feel confident -- so you're telling me, yes, that's safe you don't have to worry about that dividend if you're a shareholder? >> that's right. >> okay. >> now, of course, you can't guarantee absolutely everything subject to the board but, yeah, we're in great shape. >> do you have room -- >> we'll go through that on the call today. >> do you have room on the board to offset a bit of the group think from -- do you -- do you have any room or are you all filled up. >> room for you? no. >> no, i've got some other ideas who -- >> yeah, right right. right. right. we're always looking for talent, inside the company, on the board, everything. i've got a great board. >> just to balance it out. >> they do a great job. >> you don't need to curry favor with the obama administration anymore, do you, with -- i don't understand the -- >> hiring ernie moniz had nothing to do with president

obama, it had to do with moniz. >> you don't need to suck up to me either. >> always good being with you. >> good to be with you we'll see you again in studio. when we come back, we're going to check in with andrew. he's in pyeongchang with an olympic update as we head to break, take a look at the markets this morning. last time we looked they were all in the red you can see the ftse is now up just barely, break even. the cac in france is down by .3 of a percentage points the dax is down by .6 of a percent. stick around, we'll be right back

today, innovation in the finger lakes is helping build the new new york. once home to the world's image center, new york state is now a leader in optics, photonics and imaging. fueled by strong university partnerships, providing the world's best talent. and supported with workforce development to create even more opportunities. 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.

welcome back to "squawk box," everyone equity futures this morning have been a mixed picture dow futures are indicated down by 37 points s&p futures down by just over 2 points the nasdaq is indicated higher, up by 16.5 points right now. >> let's get to andrew in pyeongchang. andrew ross sorkin joins us now with more. you'll give us some content-type stuff, andrew. just on a personal level you found a decent restaurant, place you like to go yet have you been out and about? >> reporter: we found a place. we found an italian place in seoul two days ago that was

rocking. they're giving me a look like i'm crazy. mastrata we'll get you the name unbelievable, i swear. but we've had -- and, by the way, i don't know, do we have film of it carl and i and the gang, we all went for some korean barbecue on friday -- on saturday night and i thought we actually filmed some of it maybe we'll show you some of that in just a little bit. in the meantime, there is a little bit of olympic business going on here, and it's olympic business that most people don't talk too much about or know anything about, and that's the business of snow, in this case snowmaking >> reporter: by the time the olympians hit the slopes, two snowmaking companies have already passed the finish line. >> phase one, we've been battling 2015 and phase two in 2016. >> reporter: italy's technoalpin

makes the snow. >> we have the snow between alpine and freestyle we made the snow for 25 of those events 80% of the events are held on our snow. >> reporter: while michigan based smi snow makers provides powder for alpine skiing and biathl biathlon. >> men's and women's downhill is the longest, steepest, meanest terrain in our industry. in terms of installing the snowmaking equipment, designing it and making the snow, i would say it's the most challenging venue. >> reporter: it's not uncommon for a host city to need to hire multiple snow makers one single venue can require as much as 8 million square feet of snow. >> reporter: these friendly competitors have 18 years and 13 years of experience to pyeongchang and their most advanced technology. while technoalpin has 60% of the market share, host city gaung

province buys the equipment and plans to turn pyeongchang into a winter sports destination after the games end. both companies see the most growth right here in asia. >> china's definitely the market that's booming right now in our industry and a place where new skiers are being built they have the boom going on with the 2022 olympics being in beijing and the government has made a commitment to try to create a lot new skiers and snowboarders and winter enthusiasts so they're promoting the investment in the resort industry. >> reporter: no surprise, both of these companies plan to bid for the snowmaking contracts in beijing in 2022, guys. this may be a growth business. if we're looking for investments, you can't invest in them just yet. by the way, interesting about snow, i just thought it was water being sort of thrown through these machines at high power, very cold not so much. there's a whole other thing that goes on and also the texture of

the snow, sometimes they even add dirt and things in terms of how they do it >> why, to make it fluffy instead of icy >> reporter: much more complicated than i ever knew sometimes they have to lay down almost ice first and then it's like a layering situation. anyway, the science of snowmaking is something. >> andrew, have you been feeling okay >> reporter: have i been feeling okay >> because your voice on that track, at first i didn't think it was you. >> reporter: yes, why. >> because your voice was so low. i wondered if you were up too late or been sick? >> reporter: no, no, no, no, no. that was me -- see, the producers are going to laugh that was me trying to sound like a better sound person. i was trying to get the voice -- >> honestly, i heard that and i was like, who tracked this package. that's not andrew. >> reporter: sometimes when you track these packages you try to get your voice to be like -- to modulate it. anyway.

>> you tricked me. that was good. >> reporter: these guys are going to laugh -- you can't see, they're all going to laugh at me anyway. >> very genuine just to cop to that. >> yeah, sure. honestly, i thought you were sick because it -- >> reporter: frankly, it's so cold that my nose is dripping. i thought maybe it looked like i have a cold. >> it could be that. >> it sounded like you had a little bit of cold you were channelling who's your idol david meuer? >> moving on. >> i was channelling joe kernen. >> oh, my gosh, you sound like your a a little sick your voice is lower. make sure you get enough sleep tonight. >> reporter: okay. thank you. >> thank you, andrew we'll check in with youin just a little bit in the meantime, let's get you some stocks to watch on the opening of wall street. also, amazon has quietly launched an exclusive line of over-the-counter health products what it may mean for rite aid, walgreen and others. we'll be talking to warren

buffet on monday this is the ask warren show. you can send them to u us @squawkcnbc on twitter and you can use #askwarren "squawk box" will be right back. i think that she's a very nice girl... you never got the brakes looked at? oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital.

♪ ♪ a couple of stocks to watch this morning advanced auto parts reporting

quarterly profit of 77 cents a share. that was 14 cents above estimates. revenue was above forecasts in what the company calls a difficult sales environment. foot locker increased its quarterly dividend by 11 cents to 34 1/2 cents. the apparel business announced a $34 million capital expenditure project for this year. boyd gaming fell short of estimates. 22 cents a share is what the company posted and revenue also fell short of analyst's forecasts due to slower business in the las vegas market. shares of lending club are down in a big way after the company reported results the peer-to-peer company reported both a miss on the top and bottomlines. lending club reporting -- citing an expense of about $77 million from a class action settlement the lending club ceo has been trying to repair the credibility of the company since an internal

probe back in 2016 found that the online lender had falsified documents when selling loans to an investor. check it out though, shares of lending club down by 9.2%. they are off by 30% in the past year. in sports news, for the first time in college basketball history a division one program will have to remove its national championship banner. the ncaa is imposing penalties against the university of louisville, including vacating that 2013 national title as well as wins between the 2011 and 2014 academic years. the punishment follows an investigation into recruiting practices at the school after a former staffer allegedly arranged striptease dances and sex acts for some of the recruits coach rick pitino denied any knowledge of the incidents he was fired last year after the fbi announced a separate investigation into corruption

and bribery in the school's recruiting practices just on a separate note, more current, that's a -- feel for louisville fans. you've got to play by the rules, obviously, but, god, that just really hurts for what was a great season. >> yes right. >> but what i was getting to is that, you know, xavier lost to villanova on saturday. >> you're going to admit this? >> i watched it. i was getting so angry at that ginger on villanova. my kids are both gingers. >> you have a little bit of red in your hair. >> dante -- i knew he was going to stick a dagger in xavier. so, anyway, the reason i bring it up, they did not move in their ranking. >> standings >> still fourth, villanova is third. meanwhile, cincinnati, u.c. had 39 home wins, they lost to wichita state, they dropped six places to 11th

this big east tournament, which is coming up in the first week -- >> right here in new york. >> bill murray loves xavier. >> his son is the assistant coach. >> that's right. >> big tournament is coming up villanova/xavier will be great coming up, mortgage rates. how about something really important. mortgage rates are moving higher applications dipping lower that could put pressure on the spring selling season. after the break, check out the futures. markets still down but off its lows "squawk box" will be right back.

today's market test, the fed. stocks on track for the biggest monthly decline since 2016 as we countdown to the release of the central bank's latest minutes. new this morning, ugly numbers for potential homeowners mortgage applications tank as rates rise a check on the housing market coming up. plus, i'm live at the olympics an update on where the u.s. stands and what you need to watch straight ahead as the final hour of "squawk box" begins right now ♪ ♪ live from the most powerful city in the world, 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 beck can i quicbecky quick. andrew is at the olympics. markets down off 30 or so. the nasdaq has been up for most of the session up 16, 17 now. dow down 40. the s&p down just a little over 2. treasury yields again have come down from some of the levels we saw yesterday above 2.9. the ten year now at 2.88 here's what's happening at this hour. investors are going to be counting down to 2:00 p.m. eastern time that's when the federal reserve will release the minutes from the most recent meeting. we're all going to be looking on any signs and clarity on the future path of interest rate ratings. that's what futures are keying off and bond prices, too in the meantime, amazon has quietly launched an exclusive

line of over the counter health products it could challenge cvs and walgreens. sources tell cnbc that amazon does not own the products which are made by generic drug maker perrigo. this puts them in the position to squeeze other retailer's margins. take a look at shares up by half a percent. amazon launched the basic care line last august including 60 items that ranged from ibuprofen and allergen the trans-pacific trade deal out overnight with 20 positions that have been extended or changed. the original deal was sent into limbo early last year when president trump withdrew from tpp. among the 11 nations remaining in the deal, japan, australia, canada, mexico and they expect to sign that deal in march. some stocks to watch, garr m garmin beat on the top and

bottom line. it was highlighted by strong growth in the marine and outdoor segments dish reported a net increase of subscribers of about 39,000 for the fourth quarter compared to a year earlier however, that does include 75,000 reactivations in the hurricane hit puerto rico and . u.s. virgin islands. fourth quarter profits surged thanks to a roughly $1.2 billion benefit in this case related to tax reform mortgage applications out in the last hour. total volume dropped another 6.6% for the week. joining us right now is mike fratantoni he is the chief economist and senior vice president of the mortgage bankers association mike, thanks for being with us today. >> good to be here, becky. thank you. >> did that come as a surprise to you, decline of 6.6% in mortgage applications? >> it didn't would he saw another increase up to 4.64% we're up almost half a percentage point from the

beginning of the year. refinance is driven entirely by where rates are headed this is another head wind for potential buyers. >> so are we at that point where nobody's going to be trying to rush to refinance even though we expect that rates may go higher from here? there was a point where as rates started to pick up everybody was rushing to get in before rates hit these new levels is that -- are those days gone >> yeah. we think we're pretty much going to be flat from here in terms of refinances you still have some borrowers who want to take cash out of their property and may refinance. i don't see a lot of opportunities for any rate returns at this point. >> we have just been reporting on home depot, the reported earnings earlier this week that was a big deal because they had very strong numbers. the analysts that we talked to said it was because home prices were coming back and people were using some of that money to go ahead and fix up their homes once again that data point doesn't quite fit with what you've just said how do you kind of make those two ends meet? >> well, there's always two sides of the market. there's the refinance side and people who are borrowing to buy

a home higher mortgage rates are somewhat of a headwind for buyers, but really the major constrained has been the lack of inventory in the market. what we need is for builders to put some more units out. what we saw in our data in january, for the first time in a while, we had a big jump, 18% increase in applications for people to buy new homes. we saw the big jump in housing starts in january as well. we're going to get some more units on the market and that's going to be the biggest thing we need to get sales volume up. >> a lot of people who are looking to fix up their home take out a home equity line of credit that doesn't really count in the mortgage numbers, right? >> that's correct. we're looking at the numbers to refinance or buy a home. >> in terms of what's been happening with sales, you say hier interest rates don't generally affect these things. is there a point of inflection that you think would affect new home purchases >> you know, i think if we were up 150 to 200 basis points from here, obviously that would bring

things to a screeching halt. the kind of increases we're anticipating of another maybe point over the next 12 months, you know, that's really not going to be that much of a headwind for a new buyer, to are a first-time buyer we are seeing a little more weakness in that part of the market, but for the repeat buyer, again, their real problem is they're weary of putting their own property on the market for fear of not being able to find a new home to buy. >> how would you describe the overall market because there's so many investors that like to play it in different ways if they're looking at some of the new home construction companies or if you're looking at any of the inputs that go into new homes. what is happening now in terms of homes that are being built and existing homes that are being sold >> i guess i would say the biggest thing to watch is just the longer term demographics here we expect we're going to get 1.5 million new households per year over the next decade at this point we're building between 1.2 and 1.3 million units. there is an incredible shortage

of units on the for sale and for rent side of the markets i think there's going to be a tremendous increase in construction for the next several years. so lots of places where i think investors could find some good opportunities. >> sounds like you are describing a seller's market is that accurate >> absolutely. again, with inventory so low, with three to four months of supply really across the country, i think lots of opportunities for sellers who have been waiting to move up, move down, downsize, move across the country for a job. there are lots of opportunities for sellers to really find some good gains in this market. >> you know, the one exception to that rule might be in situations where we are dealing with people who have the state and local taxes that are going to go up significantly is that going to be a big headwind for people who are trying to sell homes above a certain price limit in places like new jersey, new york, connecticut, california? >> so all in we thought the tax bill was a net positive for the economy and for the housing market because you have most

households with more after tax income at the end of the day as you note, there are a couple of markets and, you know, new york, new jersey, california where the limitation on the state and local tax and the lowering of the capita, mortgage interest are going to crimp demand a bit, but, again, we're really constrained in this market by supply, not by demand. until we get some more units on the market i don't expect that to have a major impact. >> mike, thank you for your time. >> thank you. coming up in the next half hour, walmart's ugly day on wall street we'll hear about what's ahead with that retailer with analyst janet niffen first, a live report from the olympics andrew is in pyeongchang andrew, what's coming up >> reporter: coming up we've got the latest highlights from the games. i'll show you some pretty cool stuff. plus 2006 olympics medalist sasha cohen. we're coming up with more after this it doesn't matter what kind of weather.

it doesn't matter what time of day or night. when mother nature's done her worst, the only thing that matters to us is keeping the lights on for you. the hard working men and women of the international brotherhood of electrical workers, dedicated to keeping the power on in communities across the country. because when bad weather strikes, we know what matters most. the ibew. the power professionals.

today, the new new york is sparking innovation. you see it in the southern tier with companies that are developing powerful batteries that make everything from cell phones to rail cars more efficient. which helps improve every aspect of advanced rail technology. all with support from a highly-educated workforce and vocational job training. 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.

welcome back to "squawk

box. futures right now indicated a little bit lower we've seen it down about 39 points on the dow. the nasdaq is up 17 and the s&p down a little over 2 in europe, earlier there were some positive arrows even though we were down yesterday now negative though, a little bit anyway germany and france both lower and the ftse up a little bit the ten year under 2.9% again. last time it was up to about 2.88 where it is now. let's get back to andrew at the olympics andrew, lots of stuff you've been chasing down there. >> reporter: let's get you caught up on the latest. here is what is going on at this hour tough day, we should say, for u.s. ladies in figure skating. american athletes all had technical errors they're now sitting if you can believe this in ninth, tenth, eleventh place heading into friday's free skate. two athletes from russia at the top of the leader boards as of now russian athletes have yet to win a gold medal in these

games. that may be about to change so we'll be watching for that when these olympics end in four days some olympians may be moving on to their, quote, next step, next act sasha cohen, 2006 olympic medalist knows best how to do that well. we spoke to her about how she made the switch from athlete to civilian >> the win of gold is really important talking about the transition it's anything from loss of purpose, which can be very disorienting and just really hard to find a second career to issues of depression, which, you know, michael phelps has dealt with and now advocates for so it's -- the transition can be really, really tough i would say for the athletes to start thinking about what else they want to do, how they can use the skills that they've developed as elite athletes for their second career. and it's going to be tough because nothing is going to feel as intense and incredible and

clear as training for an olympic games. it's such a thrill, incredible moment in your life but it ends. one of my favorite quotes was from larry king and he said athletes lives and careers end when most of ours just begin and i can't imagine what that would be like. it's like facing a first sense of mortality when you're 20. >> reporter: sasha made the transition successfully. she's now a disruptive change analyst. she's a tim ferriss fan. you have a fan out there that you may not even know about. let's show you really quick on the boards where things stand in terms of the medal count right now. u.s. -- we've got them on which is a great thing we've oscillated whether we'd be in fifth or six place. we have 14, norway at the top with 32. joe and becky, i knew you were asking about the night life here. >> yeah. >> reporter: and eating and all of that. i think we've finally maybe can

show you this was carl and myself and the producing team doing a little bit of korean barbecue on saturday night, and it was -- >> look at that. >> reporter: yeah. i know, you never really want to watch people eat on tv but there you're watching us -- >> that looks pretty good. >> reporter: it was great. we tried -- we were going for sort of a medium rare to -- you don't want to go too -- you know, you don't want to go too far with it but you're doing it yourself you think, i should cook it through, which is always the big question but we're still airing out some of our clothes, actually, because the korean barbecue really has a -- it's -- it goes with you, if you know what i mean. >> i'm assuming you mean the smoke on your clothes and not other things. >> reporter: the smoke yes. oh, no >> pretty much right

joe jokes about the hibachi that i stick out the upper west side. >> that's good we have a lot more that we'll be showing you in a little bit including an interview with a couple of interesting people >> what was better, the hibachi or did you enjoy the italian restaurant more? >> reporter: the italian place was a winner everybody here i think agrees. the italian place took the cake. we were doing a piece which we'll show you i think tomorrow on -- at one of the fastest growing craft breweries, which is in south korea. we just happened to be in this neighborhood and we all decided we were going for lunch and our minds were blown so i'll get you the name of it they deserve a little shoutout. >> andrew, thank you >> kind of interesting great italian restaurant italian can be good anywhere. >> yeah, it can. >> it might be my favorite except for mexican. coming up, a hotel mogul is taking his business to space

we'll tell you who that is next. tomorrow on "squawk box" a big lineup of newsmakers you won't want to miss st. louis fed manager james bullard, david novak and the outspoken chief of jpmorgan, jamie dimon. we'll ask him about that new building is he going to do thwoe rk himself? >> no, but it's going to create a lot of jobs in new york. nobody's putting their money into equities.

they're not investing in commodities or fixed income. what people are really putting their money into is what they hope to get out of life.

but helping them get there requires a real refusal to settle for average. because when you approach investing with a tireless desire to beat the status quo, something wonderful can happen. those people might just get what they wanted out of life. or maybe even more.

sell his stake in the steelers steelers fan i guess then you become a panther fan. still, you can't just leave the steelers behind, i don't think. >> no, because for him it was a hometown thing that he was doing. >> that's what i mean. you'd have to be a big panther fan. they officially went up for sale following the team's wild card loss last month. quirky business name robert

b bigelow. he's investing millions into a new space company called bigelow space operations we're joined with that story i'm not going. no way. >> no? >> no. >> i would do it i would totally do it. >> maybe when we just really have it down. >> yeah. >> really got it down. >> i think it's closer than you think. spacex and others making rockets to take you to space where will you stay when you get there? hotel mogul robert bigelow thinks he has the answer he will sell and manage the space habitats they already build this. sound like science fiction one of the inflatable modulesort the plan now, sell more of them to the u.s. and other foreign governments and commercial companies with a long-term goal of using these habitats to house space tourists bigelow is developing new, bigger prototypes that will launch as early as 2021.

all of this coming as the trump administration looks to hand over funding and administration of the i.s.s. by 2025. that's a market that doesn't currently exist. it's the reason bigelow says he's investing millions this year alone just to quantify what demand for his private space stations could look like it's one more piece in the puzzle to colonize space this is a piece that's going to get more attention vice president pence and industry officials are holding the second meeting of the recently revived national space council down in florida today. that's a meeting that will focus on regulatory reforms in the commercial space flight industry as the u.s. looks to do just that, bring americans to the moon and then to mars and basically win the war to colonize the next frontier. >> morgan, i mean, they think that they're going to be private citizens who just want to hang out in space at the international space station or they think it's going to be companies to do research there you're thinking pretty long term

if you think it's, oh, i want to go hang out, right >> absolutely. for now and for the near to medium term for a guy like bigelow, this is about marketing these to countries the u.s. and our allies and also to commercial entities that want to be involved in science and -- >> research? >> research, exactly longer term, i mean, this is a guy who made his millions, if not billions, in the hotel business and long term he's looking at this as space hotels. >> wow that is a lot to get your head around. >> it is >> we are, yeah, getting word, sad news this morning although what a long life billy graham has died. 99 years old he was known as a counselor to many u.s. presidents he died at his home, as i said, at the age of 99. up next, a roundup of today's corporate stories plus what's next for walmart. that company had an ugly day on wall street. we're going to talk about the

consumer with retail watcher jan niffen and former hudson bay employer, jan has to come out in the hat he arrived in. wearing like a derby i thought it was a monopoly guy > lk in. >>as we head to break, take a look at u.s. equity futures. yo. wow! record time. at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. get ready, because we're helping leading companies see it- and see it through-with digital. with its high-tech the cameras and radar, contemporary cockpit, 360 degree network of driver-assist technologies, and sporty performance,

what's most impressive about the glc? all depends on your point of view. lease the glc300 for just $449 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. but some of us make somethinge make sommuch more. dinner. with blue apron, any night is a chance to see what cooking can do. 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.

♪ ♪ ♪ ♪ good morning and welcome back to "squawk box" here on cnbc live from the nasdaq market site in times square about the only place you might see a hat like this. i'm joe kernen along with becky quick. we'll get to that in a moment. among the stories -- i'll let becky deal with this among the stories front and center -- >> you brought it up you're doing it. >> i did broadcom is now offering $79 a share down from 82 to account for qualcomm's increased offer to buy another chip maker, nxp semiconductor. broadcom said it remains committed to buying qualcomm

they talked last week. qualcomm said the bid under values the company. interest rates continued to rise new home purchase applications and refinancing activity fell. the average 30 year mortgage rate hit another four-year high of 4.6%. we'll see if the higher rates affect home sales when january figures are released right at 10:00 a.m. eastern time the national association of realtors will be out with existing home sales. they're expected to edge slightly higher. all right. shares of walmart falling more than 9% on news that the company's ecommerce growth waned. that over shadowed the fact that it came in above expectations. they did lower their guidance potentially for the full year something ever so slightly up by about 40 cents to $94.51 joining us right now -- >> lost art. >> -- to talk about all of this

is jan rogers niffen he's a former may department store executive. >> i like the cut of your jib. >> also jerry storch he's the former ceo of sachs and lord and taylor and hudson bay and was vice chairman at target. so both of these gentlemen have a lot of experience in the retail industry and know what they're talking about. >> they do should we leave it on? >> for right now >> where do you get a hat like that these days? >> this hat was made in 1955 when i talk to people i say this hat is older than you are but in this case i'm not sure. >> ha, ha, ha. it is older. quite a bit older. >> not older than me. >> tens of dozens. >> it's the youngest one i own. >> it looks really expensive it is nice. >> it is really expensive. >> you wear it pretty well better than -- than i might imagine. >> let this be a lesson to me not to run into you on the way into the building because i

wouldn't be here in this hat otherwise. let's talk about walmart and what happened yesterday. massive selloff. biggest selloff that it has seen in 30 years. jan, you have an interesting perspective. you didn't think the selloff was warranted. why? >> i was surprised it sold off so much on the news. yes, they were a little disappointing from the point of view of growth onion line but they told us they were going to grow 40% this year online. i believe them when they tell me things like that i was surprised when people took that so negatively i didn't think anything was so wrong with the earnings projection other than it wasn't what the street thought it was going to be. that's an analyst miss, not a company miss even there it was 10 cents i didn't think it was 10% on their stock price. i don't think walmart's ever looked better than it looks. jerry was with target. we had caldorn venture i competed with walmart for years. i stocked shelves in 1968. over the 50 years i've been watching them, i don't think they've ever looked better at

the store level. >> jerry, what do you think? >> it was kind of an over reaction the short term doesn't matter. the stock's been up huge this year it's not worth $30 billion less today than it was two days ago that's silly nonsense. the idea of growth slowing online, it was up earlier in the year so high because they had bought jet and they were analyzing it as soon as they weren't anymore, of course the growth came down still growing by 20% online. the question isn't the short term, it's the long term amazon online is more than fen times the size of walmart. over half of all searches begin on amazon. that's what walmart has to compete with in doing it is going to cost a lot of money i wasn't concerned about the growth rate, i was more concerned about the degradation in the margin rate which is off another 50 basis points partially due to so-called price investment, which is what they've been doing -- >> that's not just ecommerce. >> food was a big part of that. >> but also as mentioned on

their -- in their report but very clearly, the profits are off because of the negative arbitrage and the profitability of online sales versus offline as they switch more, they become less and less profitable that's the real challenge is harnessing their half a trillion of sales, 95% of which are in stores. >> only 4% in ecommerce. >> so they come at it with a profitable model or is it ecommerce sucks all the profit out of everyone, including walmart. >> let's talk about this, they are shaking up their ecommerce strategy and that may come as a bit of a surprise for people who bought into it and the belief in mark lorie they're trying to win the young, urban shoppers they're investing more in walmart.com and trying to win people to those brands does that concern you including a report that says mark may be leaving, the guy who created jet.com. >> walmart's their corner stone brand. of course they should be

building a walmart brand the only chance they have against amazon is by taking walmart.com and making it a monster. that's where the investment should be going. that's what they're doing. as for mark, he's a fabulous guy. he's wonderful he's superb, right instead of buying jet, they bought mark, buying that as a future in reality, if walmart can survive the departure of sam, they can survive -- it's not about any one person. >> our guess, all of us, he wasn't really a long-term player i was hoping he would stay longer than he had. >> we don't really know. >> that would be a negative. i feel exactly the way you do about what he's done there and how great he is. all in all, even if that happens, it won't change my view if walmart's going to win on line and that they and amazon come down to winning the battle. agree with everything that jerry said what people thought was wrong in the walmart numbers i thought they knew that i thought they knew the growth

margin was going to be lower and the returns would be less. i thought they were willing to pay for the company in any event. the 10% still shocked me. >> people are confused they don't know how to judge a bricks and mortar all channel retailer that grows ecommerce. meanwhile, they get a buy on sales growth amazon has been that way year after year after year. if they want to grow sales, all they have to do is put their devices on sale and lose more money, but it doesn't matter most etailers do not make money. >> let's get back to your question, which is is this a situation where there are just never going to be any profits online >> i think there will be profits online i think the key is harnessing that all channel model that's why amazon bought whole foods. theres a better model down the road the reality is home delivery is an approach shusly expensive way of doing business. >> they still don't make much money. >> they don't make money online in terms of merchandise sales.

they make money through all the other stuff and through sale of digitizable products which don't have the last leg distribution penalty. itlike a hybrid model and people will make money. the different question is will retailing ever be as profitable as it used to be sort of the monopoly with physical locations so valuable goes away. is it like profits on stock trading or bond trading which have been squeezed out were they become a commodity transaction because it's all on the screen. >> and that 96% of walmart sales that aren't online that grew by 2% store for store, i think part of the growth there is really attributable to the fact that they have a strong online business. >> for sure. you know, i don't mind that they do price investment, by the way. underneath all of this their com sales were up 2.6% stores were up traffic is up. that's fantastic in this area. most people are seeing decline and the negative arbitrage is even worse walmart actually grew their business in stores for the first time in a long time we're seeing

that and more and more retailers with the great holiday season. i saw a lot to cheer about there in the short term. the long term is what happens to profits as ecommerce grows. >> would you buy the shares? i would. down 10% walmart's on sale? works for me >> i realize you're not in the position, jerry, of making stock recommendations, but would you buy into the idea of -- >> i was speaking -- >> i knew you would. >> i think it's been up so much lately doug's fantastic there are stocks that are to me represent better value, for example, i love t.j. max you know, value is where it's at i saw another study today that said that's where all the macy's customers have gone. they're doing fantastic. costco is fantastic. home depot, lowe's there are other people who have all the winds going with them that don't face that kind of battle walmart's still up 35% in a 52-week basis. >> sure. >> is that where you want to make your basis? >> i agree with all of that but t.j. max we'll have to come back and have that conversation.

i think we're getting other done in the off price space i still like ross and burlington i think t.j. is becoming a low price department store and i think it's going to be tough for them to grow the business. we're seeing people to have to start to pull back we're seeing ralph want to pull back from the off price space. we're seeing michael kors pull back that will make it harder and harder they're still winning the game but i'm not a big t.j. max fan. >> as i used to tell my guys at target, don't ever bet against t.j. or walmart. they are so smart and they keep at it and they're perfect sis accide tent >> doug mcmillan has had a couple of rough days yesterday was one of them. yesterday was one in 2015 when he told the market he would be investing in his people. stocks sold off that day, too, not like yesterday

to have the walton family support, does he still have it >> absolutely. he's the reincarnation of sam walton he's the best thing that's happened to walmart in one heck of a long time i don't think there's any risk to him in his job. he has the advantage that as long as they like him, nobody else can say what he does because they still control the voting block. >> he's a great guy. he's not arrogant. people like to work for him. >> he's good at it. >> he represents the values. >> and he started out i think stocking the shelves, too. >> he did. jerry, thank you very much jan, thank you. >> a long time after i stocked shelves. i wouldn't do this for anybody else but you this hat. >> this is amazing. >> do you ever combine it with the walking stick and the cane. >> absolutely. >> and umbrellas. >> inflation hedger goes up in value. >> hats are under used in current times. >> i own 20 like this one not counting all the rest i own. >> what's the deal, jerry? >> you don't need a hat today. >> he has hair he doesn't need a hat. he looks good without a hat.

>> gentleman, thank you both >> i have to have a hat. folks, we have some news right now from price line. seema mody joins us from cnbc headquarters. >> price line is renaming itself to booking holdings. i spoke to the ceo who said the name change better reflects its business it has more than 1 point be point 5 million properties, generates on average over 1 million bookings per tai and is the primary driver of earnings vogel is betting that a change to the company's parent name will help it gain a larger customer base in the united states saying, quote, we're better known outside the u.s. than inside the united states by changing the parent name we expect people in the u.s. will have a better awareness of all the different things that we do now rebranding of priceline comes as online travel operators face intense competency competition from google, airbnb and traditional hotel operators.

the latest report from rival expedia resulted in shares dropping 15% booking holdings reports next tuesday. joe, back to you. >> seema, thank you. appreciate it. when we come back we're going to take you back to pyeongchang. andrew ross sorkin is there. andrew, what's coming up this time >> reporter: when we come back we're going to give you the latest on elizabeth sweney she's the latest american skier competing for hungary. she's become an object of fascination. we will explain when we come back ♪ ♪ where can investors seek predictable income in an uncertain world? pgim sees alpha in real assets. like agriculture to feed the world. and energy to fuel its growth. real estate such as e-commerce warehouses. and private debt to finance transportation and infrastructure. building blocks of strategies to pursue consistent returns over time from over one hundred fifty billion dollars in real assets.

partner with pgim. the global investment management businesses of prudential. who's the new guy? they call him the whisperer. the whisperer? why do they call him the whisperer? he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker? sorry. we are not on speaking terms. what's with the coffee maker? (sighs) i hate missing out missing out after hours. not anymore, td ameritrade lets you trade select securities 24 hours a day, five days a week. that's amazing. it's a pretty big deal. so i can trade all night long? ♪ ♪ all night long... is that lionel richie? let's reopen the market. mr. richie, would you ring the 24/5 bell? sure can, jim. ♪

trade 24/5, only with td ameritrade.

we are watching shares of broadcom, qualcomm and nxp as one of the more complicated takeover proposals of recent times becomes even more so broadcom has cut its offer to buy qualcomm from $79 to $82 it comes as qualcomm increased its bid to buy nxp qualcomm had been resisting broadcom's offer the two sides didn't talk last week but now they're coming back they're saying that their price originally was contingent on them getting nxp and not paying anymore money for it

this is their way saying, okay, we need to offset the money you've given away. >> not immediately obvious if you're buying two companies. >> correct but if it was -- >> if you're over paying. >> right they're coming back in and saying we're going to throw money away because you'd go away because you said you'd go away if we paid more. >> andrew is in south korea. he's live at the olympics. i'm thinking, andrew, can you get a deal on a big samsung 75 incher can you bring that back on the plane? >> reporter: maybe there's like a sale >> yeah. >> reporter: maybe the prices are good we could go shopping for a samsung tv but maybe -- would there be any tariffs do you think to bring it back usually they ask you how much everything is worth. i don't know -- >> any day there could be. any day there could be apparently >> reporter: i have -- i have global entry, joe, so maybe i would just sail right through. >> is it face recognition? >> reporter: fingers

four fingers, i think. i think. >> okay. >> reporter: in the meantime, we've got to talk about elizabeth swaney she is the talk of the town. we've talked about her before. she's the american skier competing for hungary in the games because she didn't qualify as an american she competed in the freestyle halfpipe which can only be called an underwhelming performance that put her in 22nd place out of 24. she didn't do anything interesting. it's unbelievable. she goes back and forth, back and forth. despite this poor showing, a lot of attention on the way she got to these games, essentially by earning the technical points to get here without facing any serious competition and some people think it's a bit of a scam now the i.o.c. even addressed her performance. they said the olympic games are about universe salt at this and reaching out around the world. they are also about elite sport. the two can go together. there's a proper qualification system and we will keep that but

we also need to leave the door open to universality she appears to have done very well with the universality the debate is continuing is there a legitimate way to get to the olympics? i should also say the "l.a. times" reporting this is not her first attempt at doing all sorts of extraordinary things. she once ran for governor of california, lost to arnold swhats neglige schwarzenegger she attempted to reach the olympics before in the skeleton for venezuela of all places. she managed to go to the world kun in this sport. now for the past several years she's done it simply by not falling she made it here so we can give her credit for her persistence and hopefully later today we're going to catch up with her here. >> i don't understand the statement from the olympics. they're saying basically -- what

is universality. we need not an equal playing field or what's that mean? >> i think it means we're a global game. a feel-good nature and she clearly -- by the way, there's a lot of people who feel great about her. she's somebody who had an olympic dream and boy did she find a way. >> here's my bigger problem with all of this, when people from one country go somewhere else to another country because they can't -- you know, if you're an american, you should compete with the american teams. how do you wind up in venezuela and hungary doing it i have a bigger problem where it seems like gaming the system going wherever you can. >> reporter: harvard graduate. has a business in the bay area she -- she clearly found a way where there's a will, there's a way. so this will be a debated topic for some time. >> how do you feel about it? >> reporter: among a number of athletes and others. there are a number of athletes and others who say, we need to change the rules she picked a sport where there's -- where there's

actually very few women in the sport and so literally if you don't fall in this instance, she was able to get here she was -- by the way, she would go down the halfpipe, up the halfpipe both ways, very little air. she wasn't trying to do anything tricky. >> do you think it's fair or not? >> reporter: trying not to fall. i think they should look at -- they should look at the rules but she seemed to make it within the rules somehow. i don't know. >> i've seen a side of becky that i hadn't seen much, andrew. sort of a -- sort of an america first sort of zen xenophobic. >> not globalist at all. not happy when -- >> doesn't care. >> well, when nor -- andrew, you're with me on this we want everyone to do well. i mean, this america -- >> reporter: we want everyone to win. >> a new side of her. >> i get the flag behind me and

you get the coffee cart. >> very xenophobic. >> how do you get into this without rooting for your home team how can you possibly watch the -- >> they're athletes. it's the sport >> reporter: we don't know how she did it, but i should tell you there's a good chance that we're going to be talking to her a little bit later today i have an interview when it happens. >> not going to take sides >> no, he agrees with me. >> maybe he doesn't want to take sides. that makes sense. >> thanks, andrew. just a noose i'm telling you, wow. >> u.s.a u.s.a. >> yeah. yeah see the democrats roll their eyes in the state of the union -- >> if you watch -- i watched brady when she fell and i cried. i literally cried. it was the first double turns that she did and she fell at the beginning of the routine. >> you can cry for good moments and sad moments. >> yeah. you think about how much time she spent. >> i love you. it's great the whole thing is great i'm glad we have it. anyway, when we return,

we're counting down to the opening bell on wall street. we'll take you live and check in with a trader. here are the futures, they've been down for most of the pre-market session but getting less and less. dow down 11. premarket session but getting less and less sion but getting less and less sion negative people don't invest in stocks and bonds. they don't invest in alternatives or municipal strategies. what people really invest in is what they hope to get out of life. but helping them get there means you can't approach investing from just one point of view. because it's only when you collaborate and cross-pollinate many points of view that something wonderful can happen. those people might just get what they want out of life. or they could get even more. today, smart planning is helping the new new york

rise higher than ever. as the world leader in unmanned aerial systems, we're attracting the world's best talent to central new york. and turning the airport into a first-class transportation hub. all while growing urban areas into vibrant places to live and work. 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. to grow your business with us in new york state, thwho hold themselveshe to a higher standard. they are called "cfa charterholders." demand the best. demand a cfa charterholder. cfa institute.

all right. welcome back to "squawk box. futures are getting better in terms of being less negative throughout the session down 19 on the dow nasdaq has gotten more positive. up 25. the s&p just down fractionally down less than a point joining us from chicago is scott nations of nations shares. also a cnbc cribber. would you say we tested the lows or broke through the lows of the correction with the s&p or do you think we get a partial retracement of the selloff >> i think we've seen the lows of the s&p that's because on the 5th and 6th we saw some panic selling. i think the low is inbecause the dow got down 1500 points essentially in the span of a few minutes. i do think we have some

interesting set uptoday. you know, we'll sell 2$258 billion worth of treasuries this week that's a colossal amount most of that is short-term what to pay attention to today, the five-year and the seven-year and the ten-year if the people who are buying all this stuff are happy receiving the highest yields they'll receive since 2008, that's great. if it's another case of real life example of the prisoner's dilemma, if they turn and sell that stuff, to get whatever they can, the s&p will have a tough time >> you think we'll get out of this multi gazillion dollar balance sheet the fed has built up do you think we'll get out of that okay when we look back on it two, three, four, five years from now will it have been seamless the way we exit?

>> i don't know how you unwind that and do it seamlessly. you cross your fingers and you hope i think the fed is clearly behind the curve we're in a situation where the effective fed funds rate is 1.4% you can only describe that as an emergency rate we have 3% growth. generational lows in unemployment generational lows in initial claims and the stock market is relatively close to all-time highs. i don't know how you call that an emergency situation the fed is behind the curve. i think they should be paying attention to the long end and shrinking their balance sheet more than paying attention to the short end. that's the only way to keep the yield curve from inverting inadvertently. >> seems like inflation takes a while to conjure i guess that's the other worry eventually that would happen we've seen a couple of hot

numbers. >> i think the problem is the fed is looking for inflation in all the wrong places and neel kashkari is leading the charge if you're looking for inflation in the price of a bar of soap, gallon of milk or toilet paper, companies like amazon killed that that's no longer the appropriate measure. you have to look at a different measure. i think asset prices is one reasonable place to look the fed keeping rates too low for too long, clearly caused a crash in 1929. i think they clearly caused the trouble that we saw last decade. and so they have to be careful going forward. if all they're doing is creating a bubble, then short-term rates this low for this long doesn't do us any good >> okay. scott, thank you i'm getting some -- >> thanks, joe >> getting some odgo ideas about participation trophies >> which we will talk about when we come back hey, need fast heartburn relief?

try cool mint zantac. it releases a cooling sensation in your mouth and throat.

zantac works in as little as 30 minutes. nexium can take 24 hours. try cool mint zantac. no pill relieves heartburn faster. tomorrow, it's a day filled with promise and new beginnings, challenges and opportunities. at ameriprise financial, we can't predict what tomorrow will bring. but our comprehensive approach to financial planning can help make sure you're prepared for what's expected and even what's not. and that kind of financial confidence can help you sleep better at night. with the right financial advisor, life can be brilliant.

james bullard is going to be joining us, also former yum brands ceo david novak and jpmorgan chief jamie dimon

it all starts 6:00 a.m. eastern time tomorrow. >> where's andrew? >> andrew will be on for the olympics >> i thought he would be in a three box with us saying good-bye >> probably taping something >> i wanted to bring up the participation medals, and my idea about less competition. >> dumb idea usa. make sure you join us tomorrow right now time for "squawk on the street." ♪ good wednesday morning welcome to "squawk on the street." i'm carl quintanilla along with david faber and michelle caruso-cabrera cramer is off today. steady premarket after the dow's tumble yesterday there's a lot headed our way including fed minutes from yellen's final meeting and more. the road map begins with wall street on fed watch.